will get a piece of the deal. we will get a deal to make a deal. we will stay in fiscal limbo as long as we can. we will not get on with the public business for a while. >> i think is so important to think, it is abe major shift it into a policy that is likely to happen that has not occurred since 1993. we will get more revenue. and has been going down for the past 20 years. currently as a result of tax cuts and a weak economy. it is the lowest since 1950. to reverse the trend is a major breakthrough. yes, we are talking about deficit deduction. we are talking about raising revenue to a level in which can begin to support the kinds of

investments we need to make to train our future work force and to create an environment in which we can care for the elderly. >> the think americans will remain optimistic but this did of the economy? if we have not tackle the things we have just talked about like the cost of education, the housing market? we are figuring out some philosophical issues about taxing and funding? >> i think the economy has been growing slowly and steadily all in the absence of any movement, which we have seen over the test of the last year. i have worked on guantanamo for the past 10 years. my sense is that if there is some movement until the positive direction, which have not seen out of washington and enter a long time, -- in a long time, at least we will not see head

winds. we are making some progress. i see that continue. >> i want to come back to what todd said earlier. i am concerned about confidence being fragile. todd reference what happened until august of 2011. we saw in limited to lie confidence tank. market confidence grew jog with some of the market confidence plunged. i think we have to be concerned -- market confidence plunged. if we look like we are not grappling with these key challenges. what happens on january 1, everybody is saying it is a fiscal clove -- a fiscal slope, not a fiscal cliff. it is not like a zombie accomplice happens. if market confidence was up the

window, that could be damaging. >> i think is likely there is going to be a deal, some other deadline for another deal next year. it is really important and they not said a whole series of opportunities to have that kind of collapse again. they have a couple months, but they have to make sure whenever they come up with for the last significant period of time. i think that will build confidence. i want to come back to the question of housing. i think is so important to overstate the importance of housing to the economy. especially from the starter business and start up perspective. those are the companies with a lot of job creation. they all grow very rapidly, sometimes growing into large companies.

they are not starting up that high written all right now. a big chunk of that is confidence. folks often do not have financial resources. if there are looking at the value of their home and 401k, they are taking a risk. there are calculating, if i fail, what do i have to fall back on? there is a crippling effect on that sort of new start up creation. >> i think it will be hard for legislators and political executives to screw this up. there is momentum. we went into a deep hole. we are coming out of the whole. everything feels like up. the deeper the whole, the more up it feels. all of the projections are

saying we have about 142 billion jobs now. by 2020, all of the projections are saying we will have 165 million jobs. that will be 23 million new jobs. in addition to that, 32 million job openings from baby boom retirements. 55 million job openings. americans have as in this for a while. i think there is always china, europe, and the congress that can miss this up. i think it is hard to stop this recovery. we have done everything we can to do it. we can do it again if we try hard. i think we will not succeed this time. >> we have not talked about the creation yet, which polling showed is a major concern for americans. for the long-term unemployed who

have been left behind a little bit and then to the economic recovery, do you feel like the president and congress is doing enough to address the problem? what politically and realistically could be done in the next four years? >> i think the president is committed to this. i think he would like to see an extension of unemployment insurance. he would like to see it if possible an extension of the payroll tax cut. we just released a $4 trillion deficit revenue plan that calls for four and a billion dollars in short-term stimulus. we think there is a need for a infrastructure and roads and bridges. we think it has to happen sometime in the next 20 years. we have a situation with

incredibly low borrowing costs. high unemployment and to the construction industry. -- in the construction industry. whether the plan commits to the political system is another question. i am hopeful that with what is being discussed now includes some room for stimulus. the larger the deal, the larger the total package, the more the opportunity to do some things. >> on in the long term unemployment, there is not a lot of good news until this situation. it is double what we have seen. i think a lot of it is still cyclical. if we can create a demand, the jobs will come. we should talk about what happens if this goes along.

there is serious deterioration of people skills. i think supporting is a right thing to do. i think he has a list of great suggestions. i think we need to keep interest rates low. the fed needs to continue what they are doing. we need to make sure people can access interest rates. there are millions of americans out there who would be able to have more money in their pockets to spend if they could refinance their mortgage. they have not been able to refinance mortgages for various reasons. if we can fix that, that is a way to stimulate the economy. >> banks are not doing so-called protection loans, based on a really sound business plan. they virtually do not exist in today's marketplace. it used to be a staple of small-

business lending. you have a track record, a clear plan, they will make you a loan on your ability to pursue that. that is gone. they are in the same boat. they cannot get the loan. >> i am curious from the small business perspective, i think small businesses are coming up a lot right now as we talk about tax rates and making sure you protect small businesses. do you feel the issue is the most crucial for small businesses, or is it things like financing the -- >> rates are important on the tax front for small companies, i think the most important things are having a long-term sense of the code and try to grapple with tax reform to simplify the code. a center of our own polling, yes, they do not like playing -- paying the tax rates.

the bigger thing is the burden of complying with the tax code the half. you have to remember small business people pay taxes at individual rates. they do not populate their income the same way individuals do. they have to deal with the business side to see what their tax code is. they also pay the taxes themselves. like most working americans, they actually see the tax dollars. small-business people write the check and send it into the irs and see every last dime of it. there is a tax collectors, they collect with holdings and send them in as well. they are the only people who really see, touch, feel, implement every aspect of the tax code. that is why it is high on their minds and agenda. one thing about the structurally unemployed is that there may be

more hope for them this time. we had this before in the 1970's. happened then was not good. people lost 40% of their income. five years later they lost most if not all of their benefits and that is where they stayed where they left the labor market. this time there is some hope that the depth of the recession and enter manufacturing and in construction because of the tie to the construction industry and wall street will climb out of this of the enter a robust way. all of the numbers show rises in part because the whole is so deep. it is a bit of a false dawn. it is doubtful construction will go back to what it wasn't until the 1990's. -- it was in the 1990's.

because we are more competitive on energy prices and people are saying we will be relatively competitively on the energy price component and construction and cost, i think there is reasonable evidence we are starting to pull in more manufacturing. we may have hit the bottom the started in 1979. there is a reason for hope. i think the metaphor is the automobile out. there might even be more policy there. i cannot imagine if there is an aggressive policy on manufacturing and construction -- that is another word for infrastructure, and there might be some hope, especially for less skilled mails. >> i am glad anthony mentioned

energy cost. we have done even mention climate change, which i think is going to be -- it all way -- already is a major issue for the world to face. it will only grow in importance and significance. looking at the development boom and the potential for shell gas and shale oil is a real opportunity and challenge. an opportunity for significant economic growth, an opportunity to move away from dirtier fossil fuels and maybe served as a bridge into renewable energy future. it is its challenge. it does produce a significant amount of greenhouse gas emissions. we need to be careful in how we harness the value of the resource so we are not doing

things 10 years from now we will have to not only and do but will cause great damage. >> the president has made it clear that climate change, immigration reform, and getting a budget deal are key priorities for the second term and next year. what is going to happen if we do not address the issues that voters say are important to them my job creation, investment, education. the president can only do so much before we start the midterm cycle again. >> i am hopeful we will get to some short-term stimulus out of a deal. i am hopeful that could happen. i am struck by the deep sense of anxiety the american people have that we see a in this poll and we hear about the cost of higher education and its

sustainability. i do not really see that being in a comprehensive way or a way that measures up to the level of anxiety and the levels that we face in the political system now. it barely percolates into the agenda that we could be seeing in the next two years. i am concerned about that. >> i do not know if you were going to shift and long who run issues. it bears heavily not only on the short-term challenge but dealing with long-term unemployed. we have this longer-term trend is disturbing which is wage stagnation. one statistic i heard is if you look at the prime age of mail, not only have they not gone anywhere, they have dropped

until 40 years. it is not a mystery why. you have a lot of blue collar jobs, great retirement benefits. , at thank you for a globalization, a lot of shops and abroad any war. they both gave reasons to be optimistic. maybe we will see a revival. i do not think it will be the answer. i think the answer will be we have to take the workers and get them more skills, not necessarily a 4 year college degree but more skills like they can take the higher skilled jobs that are being created. >> looking out further and not the next year but the next 10 years, but are the economic policies that will be put to in place according to what people

say are important to them to make people competitive and to keep the middle-class as is. that seems to be a huge point of anxiety for many americans. >> if i had the absolute answer, i would probably not be sitting here right now. i think part of this is, yes, we have new challenges that we are facing on technological advances. that has created a situation where the engine of sustainable economic growth and center of the middle -- the good a middle- class jobs are not as plentiful as they once were. finding a way to get them back or at least find a new way to create the middle class jobs that are sustainable as a court challenge that we face as a country. i also want to say that, we should not get stuck -- in my view should not get stuck thinking we have to solve the

whole problem right away. t -- 2% growth makes everything look worse. if you were to create the aggregate demand that would give confidence to small businesses to invest again and again construction and housing going, would get the people coming into the workforce and we would start to see reasonable growth, the challenges seem a lot more solvable. i think we often get lost a in the hard challenges of our long- term future economic growth when some of the short-term challenges are not that complicated. if we were to make the infrastructure investments that we need, if we were to do the kinds of things in training to boost the growth in their relative short term, the long- term challenges would be manageable. >> getting immigration reform right from a high-tech start up

perspective is important. if you look at the company's i spoke with before, a fairly high percentage of them are start up by individuals who are either themselves immigrants or in the first or second generation of immigrants. we continue to have a real advantage in our university system. people still want to come to the united states to get an education. we have to make sure we keep them here. these are people who are entrepreneurial. we are a nation of immigrants. people who are willing to pick up and go somewhere else are more risk taking and other people are. that is one of the things that makes our country stand out an intricate world. we have to continue to capture that.

>> growth and demand, job growth for gives all sense. it will paper all of the other problems. we have been underproducing talent of in in america since about 1983. as a result of that, people are substituting so baccalaureate degrees and certificates for ba 's. employers want the more skill output and better. if the jobs are there, you are in business. >> i think the short run and needs to be a priority. i think the education issues are fast. the people you poll picked up on that. the poll numbers seem to be screaming this out. i think a vast number of things

on our to do list, we talked about affordability when it comes to education. all of the online stuff, the massive online courses hold a lot of promise. we need a more flexible college education and we need to broaden opportunities for the non university crowds. there is a lot to do on the to do list. we do not exactly know what needs to be done. we need to figure it out. i think we cannot ignore that issue. >> one last thing, and then we will move to another piece of the program. are the president in 2016, what will you tackle? you get to go first.

>> fundamental tax reform is really -- it is so crucial to figure out how to unleash a job growth. >> climate change. that is probably not going to be resolved until the next four years. i am optimistic we can make progress. i do not think we will get a national bill to deal with climate change. >> assuming tax reform gets done, i think it is education issues. >> my bias would be short-term stimulus, long-term deficit reduction. and an education reform. if we can get past all of that, we could have a serious conversation about other things. cox we will stay here.

we will have a quick welcome from joycelyn. she will talk to us a little bit more about the audience polling. she is coming. we will take some questions from the audience. >> thanks again for being here it, and thank you for dealing with the technical difficulties. as you can see, this was the first poll question i mentioned it. you can either text or tweet responses to the question. and the first question -- the majority of americans support both parties coming together to find solutions to the nation's challenges. they think we will overcome the obstacles as we have in the past. how important do you think

compromise is? we scroll over to the next slide. that has the text and twitter information on how you can cast your vote. please go ahead and text whichever code you would select for your response. you can tax the bet to 22333 or you can tweet your answer @ ftisstratcomm, that will register as well. as you can see, the screen will respond accordingly. the three responses you have to choose from are very an important. there must be compromise in the next four years and there must be more than the identity of the past. do you think it is someone important. things will stay the same, and we will still overcome our

challenges. do you think compromise is not necessary? has the votes are starting to come in we can see a little bit similar to the national poll, the majority of americans would agree that compromise is very important. a minority of people say it is somewhat important. the smallest minority as not important as well. hopefully, as the elected officials will be around the table until the next several weeks, they will bear this a in mind. thank you for voting. let's move to the next poll question. you can see it on the screen as well. this is thinking about what kind of a role the u.s. president should take a in terms of a more

realistic, short-term approach to facing challenges are a long term visionary approach where the focus is on the future and where we are going in the next 10-20 years. which of the following approaches to you think a u.s. presidential candidate should take? you will see two options. should a u.s. president take a practical approach and difficult times addressing near-term challenges or a visionary approach focusing on long-term goals for the future and not losing perspective of where we want to go to? go ahead and text to 22333. the response code you agree with et.you can tweak at @gt we will see if it matches the opinion poll.

a fair size minority, about the 44% felt short-term obstacles was the important focus of the nation. it looks like once again we have come close to the national poll with 67% of the audience i in the room and online voting for a visionary approach looking at long-term goals for the country instead of a short-term perspective. i think this would be another good thing for elected officials to keep a in mind as they face a budget and deficit issues as well as long-term goals and investments in the future of the country. thank you for participating. apologies for technical difficulties. i hope you are armed with lots of questions for the panel. i will turn it back over. >> thank you. we will take a few questions.

>> i actually have three short questions. i will let you pick the one you want to answer. i cannot remember the last time i read a serious policy article that mentioned the labor department of the then the numbers that come out today. we have had high unemployment for quite some time. where is the labor department of in the policy approach? what should it be? no. 2 is, good decisions are good statistics. federal statistics drive macroeconomic policy, drive a lot of things. what are the short-term improvements that could be made

in the statistical system that would lead to better policy? the third question is, should the united states have an explicit competitiveness strategy? i emphasize with explicit, we talked a lot about competitiveness. traditionally, we have a macroeconomic strategy. we have people like karen, people at the fed -- competitiveness strategy has not been focused on institutionally. what should be in it? >> do you want to start with the competitiveness questions? >> i do not think we should have the competitiveness strategy because i do not think they are capable of putting it together and implementing it. i enter a consistent way.

if we were able to put it together, we would have a whole new strategy. by definition, the changes in strategy might be quite radical over a few years, i like the idea of it, but tactically -- but practically, no. >> on the labor department question, one statistic that ends at home or me is that conferences and training act. for those of you who remember that. it peaked in 1979. it was the core of our economic response to slow growth.

the workforce investment act is the grandson and this funded at -- what happened in between was workforce development strategy shifted from the labor department to the education department. the of the community colleges that get all of the attention on this now. in the way it emphasizes skill development and not label -- labor market services, which i think is lost. in the end, i think it is wise. the one thing we learned after 20 years of work or subelements or training policy -- or the training policy is that it is the first chance that counts. the mainstream education system

and training system of 2 and 4 schools that are doing that work. >> karen question mark -- karen? >> i have a little bit of an advantage because i was at a dinner last night. we need better data on returns two different types of educations and college degrees. 18-year-olds are thinking about where to invest. they need to see what types of programs would most benefit them. generally, i guess three things about data and one is that we cannot cut money for data more than we have. that sector has been under a lot of strain.

we need the data to figure out what is going on in the economy. two, we need better measures in the economy, particularly financial risk. it met former life i worked at the federal reserve board -- in my former life, i worked at the federal reserve warned. three, more data on what is going on in terms of localities. i think one day we will be seeing different states highlighting different programs to help the long-term unemployed. we need to be able to assess what is good and what is bad. >> at this point i should give full disclosure that my uncle was president kennedy --

i have a deep interest in the labor department and the labor movement. it is my hope and desire that the political system, we have to force it back onto the agenda. both the work and organize labor and the cause of american workers has been shifted toward the emphasis on job creators and employers. i would like to see that shift balance balance back in line and mechanize a way to great economic growth. it is not just employers, it is both employers and employees. to push this agenda and not leave it only up to organized labor, we are trying to take that on. >> go ahead. >> yes, talking about

entrepreneurialism being the job engine in the economy, how dc healthcare policy factoring into that pushed mark -- how do you see healthcare policy factoring into that question mark -- into that? >> we have seen dramatic declines in small companies that offer health insurance to employees. that means that small companies are dropping coverage. what we have seen is companies sort of organizing themselves around the idea of an track in employees who do not recover -- of attracting employees who do not need coverage. there is a -- you are looking for a particular kind of person. you are looking for a part-time person.

in that sense, it is a problem. if you go forward with health insurance changes over the next two or three years, it is not clear how that will shake out. there is a chain of what employers have to do with 15 employees -- 15 employees and more. in terms of the labor market distortion, they should remove the situation. ideally, everyone would have coverage and they're not going have to cater their hiring practices around the. on the other hand, it is a real cliff effect for many companies. the companies that have the most jobs, will they hit a wall let some point?

it is not clear yet. >> i think we have time for one or two more questions. yes. >> my name is barry stern. i'm a senior advisor at a foundation. andrew mentioned the word "competitiveness." companies are trying to get close to the customer. typically that means splitting the company up and having the strong leader in charge and figuring out what business they ought to be in and holding them accountable for the results. in education, the most effective education is when it is closely in line with the labor market. the customer is the employer and educators are asking employers what kind of skills do you need to have to make this

economy in this particular region go? we are talking today of centralizing everything and try to solve issues like that where we know that the best strategy for education is to be in an environment where the economy is growing. tell us more about how that centralization versus decentralization opted to play out to improve the number of jobs in the country. >> in the case of the relationship between education in the labor markets, i think for efficiency sake, a gainful and clement regime -- a gainful employment regime is something we deal with. it is a use of transcript data and wave directors to tell people -- my bias is that it

should be part of mandatory high school and college -- to eight people who are about to make the biggest investment of their lives and tell them something about their career paths. -- to help people who are about to make the biggest investment of their lives and tell them something about their career paths. we need to give students information before they choose their major in college or try to get a certificate about what happened to liberty -- what happened to everybody else who got that degree or certification as well. how do employer will did they become? second, oh what their earnings were. -- how employable did they become? second, what their earnings

were. third, occupation. i think that information has to be essentially national. 30-35% of bachelor degrees are better -- up for certificates and other awards, the local state degree work's, but there are risks as well. there are agreements in place to transfer data back and forth if they want to. >> i think decentralization plans are important. it hills me every time you hear a ceo say -- kills me every time i hear a ceo say, i cannot find anyone to hire.

we have this unemployment. what is going on? we need some way to incentivize some kind of corporate involvement in community colleges so we do not hear these guys saying that, that they are getting the message through in terms of what they need. >> there is a proposal that touches on a call to radically change the apprenticeship model. it has been very successful in training the workforce in other areas. we would like to push in areas that are growing in the united states such as health care and healthcare i.t. it is growing in terms of job growth and has very low

formalized training system that can bring enough people into that workforce. we are calling for one million apprenticeships next year. we are trying to find ways to match directly with what players are looking for with the skill training we need to be doing. >> great. thank you to the panel. i think joslyn will come up and give some closing remarks. >> hi, everybody. that includes a recession this morning. thank you for attending and asking great questions and voting in the polls. also, our panelists have done a great job and having a dialogue with us on important issues facing our country. thank you. hope to see you at the next meeting. have a good day. [applause]

[captions copyright national cable satellite corp. 2012] [captioning performed by the national captioning institute] >> explore the history of new york city, albany. next, a discussion on the impact of the so-called fiscal cliff on unemployment insurance. then a forum on skilled immigrant labor and the american economy. after that, speaker john boehner and representative pelosi on the fiscal cliff negotiations. >> we have had these explosions of knowledge in medicine, but we have not coordinated care and all of the services that we have end up having cracks that they are as harmful as the diseases that we are treating. you need to step back and ask -- are we hurting people

overall on a global level? what are we doing sometimes? now we have the institute of medicine report to think. 30% of everything we do may not be necessary in healthcare? 30% of the medications that we describe? the procedures? this is something that is for the first time really being called out as a problem. >> dysfunction in the u.s. healthcare industry. dr. marty makary on his book " unaccountable." on c-span 2. >> it is estimated that it would cost -- [indiscernible]

[bells ringing] >> i chose to honor both. the sacrifice of american servicemen fighting their way through the pacific and a little girl who died as a result of an atomic bombing. it is unimaginable what that must've been like to be close to the center where the fireball igat. >> follow clifton truman daniel in his trip in hiroshima. he speaks about the inspiration behind his trip on sunday at 9 p.m. eastern. >> now a discussion on the so- called fiscal cliff

negotiations and the impact on unemployment insurance. from "washington journal" this is 40 minutes. host: we continue our look at unemployment insurance and its role in the fiscal clift debate, we are joined by michael tanner and josh bivens. mr. michael tanner, if you had your way in these discussions, where what unemployment insurance end up at the end of the day? guest: i think the emergency extension should fade away and we should go back to the 46 weeks that we have been at, the 26 weeks of traditional employment, and extended benefits in states that have higher unemployment rates. you start with the fact that unemployment insurance itself, when you extended for a long times as questionable value. we know it leads to an increase in the on and -- unemployment

rate. that is dubious enough, but when you factor in that we will deficit finance this and slow economic growth overall, destroying jobs of the same time we pay people for being unemployed, a thing that creates a problem. host: how much money do we save if we do not extend emergency benefits? guest: $30 billion, as much as $40 billion. closer to $30 billion. host: mr. josh bivens, from your perspective, how should this play out. guest: the emergency implement should be extended. we still have a week labor market. we should be clear about what is keeping the economy weak and that his lack of demand from

household, businesses, government, and not spending enough money to keep people employed. inking money out of the system would drive off the unemployment system. ployment up the uneml rate. to become the primary reason to extend unemployment is just the compassionate thing to do. people rely on the benefits. it would be a crushing blow. they provide a crucial crutch for the economy that still needs it. host: we are taking your calls the numbers are there for you. we will still have the line for those receiving of employment insurance -- tool 2-585-383. you can give us a call on that line. i want to talk about the bureau of labor statistics on unplowed numbers that are out as a just a couple of minutes ago -- on

employment numbers that are out just as a couple of minutes ago in an employment rate is down to 7.7%. mr. josh bivens, how will that play into the debate over the extension of unemployment insurance? guest: i am not sure. i am afraid we have had such low expectations that people might see this as a fantastic jobs report. i have not gone into the details. the headline number, 146,000 jobs is not fantastic. it barely beats population growth. it does not put a lot of sustained, downward pressure on the unemployment rate. my fear is we have had this creeping down of unemployed, which is a good thing, but we are so far from the late -- normal labor market. i worry people to to much

comfort in a report like this and will be less momentum to keep benefits going. host: mr. michael tanner? guest: i am in agreement. it is not a terrific number, better than expected, but this is a much slower recovery than we have had in previous recessions. the unemployment rate is much higher than it should be compared to previous recessions, coming out of them, and we're just barely doing better and what we need to do to break even. host: showing that it is a slow rate of recovery, in your opinion is not an argument to extend the benefits? guest: again, if we are deficit- financing the benefits, i do not think it is slowing economic growth. i cannot buy into the argument that we have the demand problem and we need to spend more money and have more stimulus to create economic growth.

where we have is the failure of businesses to invest because they recognize the high taxes will keep them on the sidelines. they're facing the fact that they will face lower profits in the future and are not as willing to take risks and invest. if it costs more money to hire someone, we have the new taxes, insurance mandate under obama- care, and things like that that will make it more expensive for people to hire people. host: we have the cato institute and the economic policy institute with us this morning, and the one area where people seem to disagree is measuring the benefits of what $1 put into unemployment insurance means on the backside. mr. josh bivens, what is your estimate on what $1 buys in this program? guest: a lot of economic forecasters agree this is the

most efficient form of economic support you can provide through fiscal policy. one dollar spent yields about $1.50, $1.70 in economic activity. $30 billion is at stake here. we are basically talking, if we do not do that, nearly knocking a half of a percentage point off of gdp and have 140,000 fewer jobs at the end of the year. host: mr. michael tanner, your reading on what the dollar buys? guest: not surprisingly, i do not agree. i agree with economic experts that suggest that the keynesian economics model they are using their does not work, as it assumes that on income and benefits are spent and none of this aid to pay off existing debt. -- saved to pay off existing debt. we know that working spouse houses tend to cut back.

that lowers overall income. there are a number of studies and that suggests you get less than $1 worth for your buck. host: talk about what you do with the cato institute. guest: we are a libertarian think tank, believing in individuality and free markets. a hint of things the social welfare, health care, retirement. host: and the economic policy institute? guest: we are a non-profit, making sure that low and moderate-income americans are represented in the debates. i am afraid our experts to date

are entangled with the jobs report, so you got me instead. host: darcell from texas receives unemployment insurance. good morning, talk about your situation and what you are doing to prepared? caller: i do not know if i will be effected, but i know some callers were calling in about six months and how they were able to something. i moved from florida. florida was hit hard, as one of your guests said earlier, and i could not find anything at all. one of the reasons, and this has not been brought up, is i had something on my record, a felony, about nine years ago, and i do not care what you apply

for -- retail, customer service, warehouse -- you will not get hired when they look at that record. i had moved to texas, and fortunately i was able to get something after awhile, but going straight to employers and trying to fill out applications, and they look at credit reports, all of these things and they do not hire you. they have the pick of the litter now, so they pick and choose, and this issue has not been addressed in congress at all. host: did you have problems applying for unemployment insurance with this issue? caller: not a problem applying, but then, of course, it goes to a certain time where, right now, you will be facing a cutoff. host: talk about the qualifications.

are their suggestions for changing them, or the right people who need the system getting the and in using them? guest: you need to have a strong labor force attachment recently, and to have lost your job through no fault of your own. if you quit a job voluntarily, e do not get unemployment insurance. it differs by state, but basically you need to meet some earnings threshold. that is a problem for low-wage workers who need to work many more hours to meet that threshold than others. the biggest problem today is that people that are unemployed, and will no longer be eligible, is the fiscal cliff. if we cut off the emergency compensation program and do away with the funding for the

emergency benefit program, which has been taken entirely by the federal government, we will have one quarter of the unemployed eligible for unemployment benefits, and that will be lower than in normal times, let alone recessionary times. there are a lot of reforms we could do to make a broader class of people eligible. some say you should only be eligible if you are looking for full-time work. the biggest problem right now in terms of people being eligible is the fiscal cliff negotiations. host: mr. michael tanner, are to many people qualifying for unemployment insurance? guest: i did not think it is a question of qualification. people have to have the labour force attachment. it is a form of social insurance. the employer pays into the system by 1%. the federal section is a general

revenue issue that is part of the overall budgetary issues. the big question is how long you will let people stay on unemployment insurance. we do cut back. even with the president is talking about is a smaller extension of unemployment benefits than previously. it was 99 weeks, and it has come back to 84, and only one state qualified for that amount. the average nationwide is under 60 weeks. at some point, you will have to say no, unless we turn into a country like belgium where you could get lifetime unemployment benefits. i do not think anyone plans to do that in the united states. .ost: let's go to a caller diane, are you there? we'll go to textile l, maryland on the democrat line.

-- we will go to maryland on the democrat line. caller: good morning. these people keep talking about the slow recovery compared to previous recoveries, but nobody considers how many jobs -- how many companies have shipped jobs out of the economy. there are fewer jobs. how will people find jobs? host: mr. michael tanner? guest: the number of jobs shipped overseas is much smaller than people realize, but it is no longer global to be a high- school dropout and getting manual labor job. we are moving from that manual labor, low-skill jobs environment, to one in which we will have to have more education and skills. that is the reality of globalization, and i do not

think you will have to avoid that. where to put more attention to and on getting people the skills we have to put more attention and getting people the skills. we will never have thousands of people sitting at sewing machines making t-shirts. host: another area where your groups seemed to disagree is whether the unemployment insurance creates a disincentive to look for work. mr. josh bivens, we start with you on this subject. guest: the two previous callers identified the root problem -- there are not enough jobs. the ratio is still over three- to-one. if we could wave a magic wand, we would still have a large majority of unemployed workers looking for jobs. that is not a problem of skills. it is not a problem of employers

dying to hire, but there are not the people out there. we just do not have the demand for services in the economy. that is like cutting off this source of demand would be a bad thing. in terms of a disincentive effect, we do not worry about that. a lot of research looks at what unemployed and insurance does the behavior of people, and recent papers say people that stay on unemployment longer because of a the employment insurance -- there are a couple of things going on there. you're just changing the classification of people from not in the labour force to unemployed. that is a good thing. it is not like you would have magically creating jobs by cutting off their benefits. you're keeping them actively engaged in looking for work. you want people to be a little bit choosy. it does not make a lot of sense to say a software engineer

should be made so poor, so quickly, that they must take the first job available no matter what the skill qualification is. that is not efficient for the economy. crucial macro economic support allows better matches through the economy. host: mr. michael tanner on disincentives? guest: an area of disagreement. most economists believe unemployment insurance do increase in unemployment rate, they just disagree on how much. it extends the length of time people are unemployed from about 3-to-10 weeks on average. we do know that the length of time that people spend in jobs search activity increases significantly in the last few weeks before the unemployment benefits expire.

it goes up on a daily basis by about three times. if you look at when people get jobs, there is a huge cluster in the last weeks before the unemployment benefits expire. people tend to be willing to take a job that might not be a perfect match to the length of time on unemployment actually -- match. the length of time and on income actually hurts the workers, -- on unemployment actually hurts the workers. the report suggests that extending benefits indefinitely adds permanently about 0.4% to the unemployment rate because you have skills so atrophied on unemployment insurance that they're no longer employable at all. host: bob receives unemployment insurance. tell us about your situation. caller: i'm a single-earner, and thank god i have made a good

living. assuming i could get a job, and nothing against the folks at fast food or nothing like that, but if you were making a minimum amount of money, with my situation, i would be in the street using that job. i could not pay my bills. i am not talking about luxuries. i rent. i would not be able to pay that. thank god unemployment insurance is geared to what you used to make, so that, and by the way, i am in my 60's. it is not easy. without that amount coming in that is based on what i used to make, i would not be able to survive. i would be industry.

-- in the street. host: mr. josh bivens, a chance on this one. guest: that points out that unemployment insurance is a form of social insurance. people take lower wages because the employer has to pay tax. they pay into the system while things are going well, and if they hit a rough spot they hit a benefit that somewhat match its previous earnings. it is not a lavish benefit. it is targeted to capture half of your previous earnings. some of them are lower than $300. this is not a lavish way to live. it will not induce people not to surge. -- nto ot to seracarch. you actually want to give potential workers a chance to make a decent match. you do not want people scrambling for the absolute first job available because that is not good for the employer or the employee. host: dave, mich., independent

line. caller: good morning. i worked for a company that is closed and has moved to china, and when those guys were laid off, some of them were in holland and belgium, they received like full-pay benefits for five-years-to-seven-years. in belgium, i think it was over 10 years of unemployment at full pay. so, i do not know if that is something we want to look at in the u.s., because we always talk about how europe works so well. would we want to go to a system that pays 10 years, not of the minimum wage on employment, but unemployment that pays $40 or $50 an hour. the company fired everyone in the united states, moved to china, and hired engineers over

there. it is an automated plant that makes television sets, and it sells most of those television sets, back here in the united states. host: mr. michael tanner? guest: a great number of economist would suggest that our reason why your pin unemployment rates have been so much higher is the european unemployed rates are so much higher -- european unemployment rates are so much higher because of the longevity of the benefits. it is a textbook about the fact that there is a huge problem in europe and has committed this economic crisis that has existed there over many decades. guest: two things there.

it points out just how nonlife- u.s. unemployment benefits are. unemploymenth u.s. e benefits are. the two countries that he mentioned, the netherlands and belgium, they're doing much better than other continental european countries. the scandinavian countries have much more generous unemployment benefits. there is not this simple relationship that have extensive unemployment insurance system and you mechanically generate a higher unemployment rate. host: nate from dallas, texas, receives unemployment insurance. caller: right now i lost my job because my boss was fired from the university.

and recently got my doctoral degree from that university, and i am spending eight hours a day on the computer, trying to network. i want to buck the contention that it is a mismatch of skills between the employer and the people that are unemployed. there was a recent "wall street journal" saying that part of the problem is how employers conduct searches of candidates, and her -- how recruiting is done. i think the unemployment benefits should be extended, because sometimes there are highly skilled workers who do not want to take an eight hour minimum wage type job, and they're not always a good match for that. i will leave at there and let

you all comment on that. host: mr. tanner? guest: employers are trying to get the best employees they can. productivity of the employees is what makes the business profitable. if they're not going to do a good job of it, the business will be in trouble. over time, practices change. right now we have gone possibly too much into the on-line stuff, and some of these job searches are probably not beneficial over time, i think that will change on its own. host: on the subject of european countries and their unemployment programs, don richey writes in, european folks can provide for their families and maintain for their lifestyle, even if they lose their jobs.

why is this a problem? guest: countries cannot afford it anymore. these countries are hugely in debt, and they have found a simply cannot afford their welfare states any more, but which is what is going on in greece and spain and portugal. it leads to these unemployment rates of 20% in some of these countries. host: mr. bivens? guest: that is not what caused the debt in those countries. spain had a lower gdp debt ratio than we did. i think it shows they do not have an independent monetary policy. they cannot have an independent central bank that just prints money the way that we do. i think it is the un-wisdom of the currency union. there is no evidence that countries with bigger welfare states are in bigger trouble. with the previous caller, i totally agree. the skills of workers more

unemployed is not much of to an employers. if there is was this unmet demand for skilled workers out there and employees had openings but there were not the right people, you would see wages spiking in all sorts of occupations. i do not see wages spiking in any sector of the economy right now. the idea that there is this diagnosis that, it is too bad you people are not employed, you people do not have the right skills, there is no evidence that is going on. host: jim on the republican line, from maine. caller: i think unemployment is probably a good thing, but when you expanded too far, it put a really heavy burden on the employers. as one lady called in on the last segment, the state she was

from is obviously much higher than maine is, but when it gets to a point that your state system goes broke, they put fees on the employer, and they cannot afford to pay the rates. host: mr. tanner? guest: the unemployment tax is generally under 1% even when you include the match that goes into the extended benefits. we're already running in federal debt more than 100% of gdp. once you get over 60% to 70% of gdp, that begins to slow economic growth. we are costing jobs. that is because that money is --

employers are looking down the road and saying they're going to have to pay more in the future. we simply cannot afford to spend money, especially we do not have, and still expect to grow fast enough to create the jobs we need to get these folks off of unemployment. host: mr. bivens? guest: the employer taxes that kicked in are more modest than the previous caller said. i think she had a 15% number. it is an average of $40 a worker. a lot of the states have had to repay. where we disagree is what is holding back the economy. most of the deficit we have today is a symptom of how the economy is and is providing a useful product by injecting demand into the economy, and that is why we are still constrained.

host: joseph is on the democratic line. caller: while this money is turned over to the states on behalf of the unemployed, how much of that is kept by the states? to the states to give that money back to the federal government if it is not paid out? once you open up a claim, just because you have got to clean -- claim open, you have $4,000 in your account -- massachusetts, you might have $15,000 in your account.

that money, if you do not draw it out, the state keeps it, i believe. guest: i am not sure how that would be handled. the difference between what is happening in the state fund, which is state-funded, and the federal reimbursement, i believe the federal reimbursement only goes to the states after they pick up the money. guest: that is my understanding as well. i did nothing states are able to -- i do not think states are able to keep money that is not disbursed to the unemployment. host: for you, mr. tanner, who is better at running these programs, the state governments or federal governments? guest: states have very different economic climates. what is going on the dakotas right now, they're not even eligible for this emergency unemployment extended benefits,

versus new york, which has the highest level of weeks allowed right now because of their differing unemployment rates. you want this handled on the local level and not a one-size- fits-all across the country. guest: it is administered by states. i think a lot of the state programs are too restrictive in their eligibility and have too low caps. there are some important steps. there are some important steps forward and the american recovery act. i do not see a lot of prospects for much greater federal involvement any time soon.

host: mableton, illinois on the line for independents. caller: i want to direct this to mr. tanner. i have never been in debt. i have a retirement, have a very nice pension from the state of california when i was a state police offiercer. we're not putting enough emphasis on what has happened in the last 10 years, seventrillion dollars. what would you do? how long do you think it should take to get out of this mess that the corporate thieves have taken from us? guest: i think that we suffered

a tremendous recession, and there has been an enormous loss of wealth. the question is, how do we create more wealth? how do we create more prosperity? if we can create more wealth within the country and our prosperity generally, we can spread that and try to get people back to where they were before. i do not think government does anything to create more wealth and prosperity. an economist said 150 years ago, everyone sees what the government does. the government gives a bunch of money out in programs. everyone sees that and cheers. what they do not see that in order to get that money, the government had to take that money away from other people who do not hire workers now. that is the unseen cost of these government programs.

that is what is holding the government down right now. host: please ask the question regarding the long-term history of wage decline, a tweet. -- and if we'd be in this situation otherwise. guest: in the last 30 years or so, you had wage growth for most american workers. wages tracked overall productivity for most of the decades after world war ii. started in the 1970's, you start to see a divergence. fewer workers started to see their wages keep up with the productivity growth. i think it is a huge problem. it did help set the ground for the increase in debt that we saw over the past decade or so.

instead of purchasing higher living standards, people look to purchase higher living standards out of a home price bubble and relied too much on that, and that is what a loss of wealth was so devastating for the economy. the failure of wages to attract productivity. it is a huge gold. we can solve the unemployment crisis that persists today much more quickly just by doing more things like providing transfer programs for unemployment insurance, infrastructure. solving that can be done quicker. host: one more call, dan on the republican line. good morning. caller: my question is, if you were to cut off emergency unemployment and you still cannot find a job, what do we do

then?a man has still got to live. if it does not have any money, if he does not have any money, what does he do? guest: it is the compassionate, right thing to do to continue these programs. it is not just the compassionate thing to do. it is the smart thing to do to keep the economy from growing more slowly. it boosts demand. this should be a no-brainer of economic policy. host: mr. tanner, last word. guest: we're going to cut it off at some point. what happens to the person who is unemployed for 61 weeks in the states that have 60 weeks of

unemployment? they will not have unemployment insurance. but some point, we're going to tell people that there is an end to unemployment insurance. instead of focusing on this, what we need to focus on is how we can get these folks employed. we have to reduce the debt, we have to reduce taxes, reduce regulation, create an environment in which people can go out and create jobs and hire more workers and then we can lower the unemployment rate and this will not be an issue anymore. host: michael tanner of the cato institute, and michael bivens of the economic policy institute. thank you for joining us. >> tomorrow on "washington journal" a chief correspondent for world and news discusses the state of the economy. and the director of the national institute of allergy and

infectious diseases. and the director for center disease control and prevention on american public health. "washington journal" live at 7 a.m. eastern on c-span. next, a firm on skilled immigrants and the american economy. after that, speaker john boehner and nancy pelosi on the so- called fiscal cliff negotiations. >> why the institute? >> it is very important within the culture. we are a culture of words, voices. words are key to our imagination, our capacity to envision.

we ourselves are not completely tied to print on the page of writing. i think that there is no other art form that is so readily accessible. it is something in literature that just captures the human spirit. >> this weekend, join "book tv" as we look behind the scenes at the history and literary life of new york's capital city, albany. saturday on c-span 2. and on "american history" on c- span 3. >> not the economic impact on the u.s. economy and american

competitiveness and the proposal to allow more skilled workers to remain in the u.s. the conversation includes senator mark warner. this event is being hosted by the university of virginia oc miller center -- virginia's miller's center. [applause] >> thank you, distinguished guests. welcome to the national press club. it is our fifth annual meeting of the conference on the world economy. i would like to pay special tribute to someone whose vision and philanthropy has made this annual conference possible. his commitment to public service has been steadfast through the years. the are grateful for his friendship. i also want to recognize the

hard work and dedication of david, juliana. they are responsible for convening this group of scholars, policymakers, and key figures from the private sector. as david has highlighted today's center, i should point out that we examine the full spectrum of issues involved in debates over immigration. in an effort to reframe current thinking about policies for highly skilled, foreign born workers, experts provided historical and comparative perspectives on the subject. they discussed the benefits of limitation of the current policies. simply put, they put deliberations together for some very smart people. a famous writer observed that

the in he disliked about an argument is that it interrupts always a discussion. our aim in this discussion tonight is to pull threads together and invite your questions and discussions and to focus on some of the big issues. to do so, we have assembled a panel for presenting three critical groups in this debate -- the academy, the government, and the private sector. we will rely on veteran journalists, alan murray, to introduce our analysts and to moderate the discussion. allen is a longtime friend of the miller center and of our governing townsel. he recently left it on my post as deputy managing editor and executive editor of "wall street journal." in his 30-year career at the publication covering politics,

he has starred in numerous roles, including washington bureau chief and assistant managing editor. during his tenure as chief, the washington bureau 13 pulitzer prizes and many other awards. allen is also the author of three best-selling books -- first, revolt in the boardroom." the second, the wealth of choices. third, my favorite -- showdown. the unlikely triumph of tax reform. it won an award. he has also received two overseas press club rewards for his writings on asia and a john hancock reward -- award.

he's a a member of the gridiron club, the economy's club of new york, the council on foreign relations. he also served on the board of governors not too far away from virginia, a university of north carolina. please welcome our distinguished moderator, alan murray. >> thank you, governor, for that generous introduction and for being able to look -- to overlook the disability of my alma mater. we have been through the most expensive election campaign in the history of the world. i think it has been pulled up, over $2 billion was spent over the course of many months. repeated debates, exhausted, and

when it was over, we woke up the next morning and discovered that nothing had changed. the same guy in the white house, the same parties controlled the two houses of congress, the same issues, the same stalemate, the same dismal prognosis for getting through this bill might that we had before the election. i do think, and i assume you will talk about this today, i think there is one issue on the national landscape that has changed, and that is emigration. it is not because immigration was a topic in the campaign. when the pugh research center polled on this issue in september, the gate voters pulled issues and told them to write them in order of importance, jobs, unemployment, taxes, deficits, and immigration came in dead last. it was not on the top of voter'' minds. it was not a topic of

discussion. what happened on election night was that more than 70% of latinos voted for president obama. republicans will up the next morning and said, may be marco rubio was right. we have a problem. that has shaken up the politics of the issue. i will be interested to hear from senator warner on this. i think it has created the possibility for some movement on comprehensive immigration legislation that will also deal with more particular issues that you're talking about today, and we will be talking about tonight. i commend the miller center for once again having the incredible foresight to have seen this month ago and to realize that this be the issue that everyone will want to talk about after the election. i think all of you know that in washington -- the governor gave

me a long and full sun introduction -- wholesome introduction. i think you know these three people very well. there is teresa sullivan who was president and wasn't president and now is president of the university of virginia. we are all very happy about that. she is also a professor of sociology focusing on a labor mobility issues. senator mark warner who in recent months and years has had an unbelievable temerity to actually talk to members of the other party about matters of great interest to the country. it -- he has been very involved in the fiscal cliff negotiations. before he was a senator, he was governor of virginia. before that, he was co-founder of nextell. stephen case was co-founder of america online.

he is a rabid twitterer. i feel like i know all the details of your life. he is a relentless opponent of entrepreneurship. we are very fortunate to have these three panelists. they each get five to seven minutes. i think we will get through it. five to seven minutes to discuss the topic. we will have a conversation among us. then we will open it up to you. hopefully we will get to all the -- all of your comments and questions. we'll start with professor sullivan. >> i am delighted to be here this evening. not only because the topic is important and the panelists are interesting, but because this conference recognizes mort kaplan, somebody i am pleased to have the opportunity to speak on behalf of tonight. we're looking tonight at immigration policy and how it

affects our -- our ability to attract high skilled immigrants. we're speaking of scientists, engineers, but reports who contribute to innovation. it is an issue that has a lot of implications for higher education. colleges and universities are in the talent business. we are in global competition for talent. all universities but particularly in research universities are competing to get the best and brightest of students, staff, and faculty. immigration policies make it difficult for international scholars to come to the united states. we undercut our national imperative to be competitive. this came after a report by the national research council. the nation's research universities were at risk. congress asked the national academy to assess the competitive position of america's research universities and to answer the following

question, what are the top 10 actions that congress, the federal government, the state governments, research universities, and other entities to ensure the ability for the american research university dementing excellence in research needed to help the united states to achieve national goals for health, energy, the environment, and security in the global community of the 21st century? the national research council is the working group of the national academy. they produce products that informed public opinion, shape policies, and advance the pursuit of engineering in madison. that question posed by congress is pretty complicated. the national research council leaders needed to put together a panel of leaders that represent a broad range of disciplines. they convened leaders from business and industry, from the academy, and from government. i had the privilege of being a member of the panel.

congress asked for ten actions that can be taken to shore up universities. restructured our report around 10 recommendations. one of those recommendations focused on policies affecting the flow of international scholars and students to the united states. more and more international students are applying to come to our research universities. uva has had a 60% increase in such applications in the last three years alone. that increase has been fueled largely by applications by chinese students. the u.s. benefits when talented students and faculty, to the country to study and conduct research. we benefit even more if they can stay in the united states to work after they graduate. it is in our interest to attract and keep talented people. many of our current policies are grimsson -- borden some --

burdensome fors international students. we need to ensure that a larger number of doctoral researchers remain in this country. we recommended that the government's -- government streamline the process for those researchers to maintain permanent residency in the united states. we think government should consider the strong step of granting residency through a green card for non-u.s. citizens who earned a doctorate in an area of national need from an accredited research university. there are some recent actions in congress to address these issues. last week, the house of representatives passed the stem jobs act. it created a new green card program for foreign students with advanced degrees in the stem the fields. the senate is not expected to consider this bill in the lame- duck.

senator -- senate majority leader harry reid said a comprehensive immigration reform will be a high priority issue in the 2013 congress. there is bipartisan support for creating programs force them graduates. that is a goal that is supported by the higher education association, including the association of american universities and the association of public and land grant universities. i will take this opportunity to dock senator warner, because he has consistently supported by skilled immigration. he introduced it -- he introduced the bipartisan start up act. it was introduced in may of 2012, it included a provision for creating and to stem the set so that a foreign student graduating with a masters are ph.d. in a strong field could received a green card and stay in the country. we hope that senator warner and congressional leadership can

find common ground in the 113th congress to successfully pass legislation to expand opportunities for our stem graduates. if we do not, our competitiveness has narrowed. >> thank you. let me thank terry sullivan and stephen case for participating. i think the miller center for asking me to be here. -- thank the miller center for asking me to be here. i think it is particularly a corporate of the miller center to ask me to be here -- appropriate of the miller center to ask me to be here to talk about this topic since my bipartisan efforts and taxing

the debt and deficits have and so successful. [laughter] this issue tonight is inexorably tied to debt and deficit -- it is a question of whether or not our country will be able to stay competitive. we all know, we all use the terms, whether you are university or private enterprise or looking at this from a governmental standpoint, we are in a global economy. how and where we invest, and how we choose to invest, from our public resources to infrastructure to work-force training, they will all be a determinant of whether we will be successful or not. one of the things that steve has worked on a great deal, and i do not want to take away his thunder, a look at how americans will stay competitive -- if we look at how america will stay

competitive -- i hear your phone -- [laughter] the question of whether or not a merkel be able to compete, whether we will be able to make investments, are we -- are we going to be able to have the kind of innovation that creates jobs? north of 80% of the net new jobs made in america in the last 20 years have come from start-ups. where had the talent come from? disproportionately from a first generation americans. we are very lucky particularly in northern virginia, which rivals only the silicon valley in terms of the number of tech- related startups, you look a little deeper, and a 1 1/3 of the tech startups in northern virginia had one of the co- founders or founders as a first generation american. the numbers in the valley are

even higher. how do we maintain that? one is talent. i will come back to that in a moment. another piece of this which we think is very complementary and something that steve has been very active in and actually did get past this year is noodles in terms of access to capital. if somebody used to be a venture capitalist for 20 years, and an elected official, that is important, but we have to broaden access to capital. it will help us stay competitive. one, along those companies on the pact to going public and easier pathway in terms of regulatory approval. second, which could be enormously dynamic and totally transform that, the ability to use the power of the internet before accessing capital, crowdfunding and crowdsourcing.

it is in the midst of being passed out of the sec. if you have capital, you have to have talent. that is where the question of immigration comes in. i think we have all looked at the numbers. unfortunately, american-born graduates in the fields of engineering, science, and math -- you dig, the numbers are fairly is stunning. -- fairly stunning. roughly 44% of graduates are in those skills. europe is at 24%. i say this respectfully, and i know we are on c-span. when the your pants -- the europeans are outpacing us, in these key fields that will drive innovation, then you know we are

in trouble. i would correct one comment. there have been at some of us, chris coons and marco rubio, we have put forward legislation long before the election that said, let's look at this talent competition issue. let's put forward an approach that many of us, those of us that have been from the business world, have been talking about for decades. let's recognize that while we need to do more to prime the pump in terms of science and engineering or math graduates, native-born americans, particularly focusing on losing the numbers in middle school where girls and children of college had enormous challenges, that is something we will have to come back to. we also have to continue to attract talent from around the world. one of the ways that we can and will is if we change our peace

policy. if we had these policies and emigration policies in effect in the '70s -- 1970's and 1980's that we had now, we would never have had the googles or intels, because many of those founders i graduated from american universities will not have been allowed to stay. our bill does a variety of things, but the two most important things are one, let's start with the lowest hanging fruit, those not undergraduate degrees but graduate degrees, masters and phd.s, in science, engineering, and math, and say, if you graduate and you had a job in america, we will give you a green card. this should be the most basic of common-sense because the remarkable thing is, these jobs,

which can be anywhere in the world, bring with them not only the high paying, high skilled jobs as well, but many times three or four ancillary support jobs. part one. part two, and this is one -- everybody knott's on the first. the second is to revise what i believe very antiquated visa policies, because those folks that have been lucky not to get rid of the summit is to stay in this country in many cases become -- through the visa maze in this country -- many times they are greatly restricted. their ability to go out and start the next aol is restricted. that kind of loss of talent goes

to the heart of our ability to compete. we also create a brand new of japan toward the sun -- brand new effort nor -- entrepreneur visa. these are things supplementing what the great work that our universities do. we still attract some of the best talent. let's keep them here. if folks want to choose to live out the american team, we want them to have that opportunity. it is in the best interest of all of us. >> it was a great summary. let's take a step back and put it in context. sometimes you're dealing with immigration and stem and visas and other specifics. it gets a little bit wonky.

i think it is important to stick -- to take a step back and understand why it is so central to the future of our nation. i think it is worth remembering that the nation once was a startup. a bunch of pioneering people decided to come over here on boats and try to build a better world and find a better life. number two, it is also worth mentioning that we did not become the leading economy in the world by accident. it was the work of entrepreneurs creating companies and entire industries that really fuelled the american story and animated it to the point where it is now the leader of the free world. it was these risk-taking pioneers, innovative, entrepreneurs, that helped to build this nation. the pioneers, the patriots, thomas jefferson, there are a lot of different facets of the story of america. one really important one that does not get enough attention is

the role of the economy, particularly the role of baltimore's, innovation to drag the economy. -- entrepreneurs, innovation to power the economy. we still remain the world's most of japan real nation. -- entrepreneurial nation. the bad news is that other nations have figured out that our secret is the entrepreneurial economy. what they have moved to do at a rather startling pace is to modify their own policies to become far more entrepreneurial around talent, their immigration policies. australia on a per-capita basis as 10 times more visas for high skilled workers than we have in the united states. on capitol, creating investment incentives, no capital gains to make sure that investment

capital flows to those countries, investing in basic research in better ways to commercialize research, less regulation, a whole series of things that many nations are doing to become more competitive. this is a global battle for talent and capital and ideas. if we do not move quickly to deal with this issue, we are going to lose our lead. we are going to wake up someday and say, what happened? how did we go from being the most entrepreneurial commission, the envy of the world, to slipping? a great example of this -- last month i spoke in detroit -- and realize two things. one was, 50 years ago, detroit was silicon valley. it was the most innovative -- and in the country, maybe in the world. -- innovative region in the

country, maybe in the world. in the last 50 years, detroit has lost 50% of its population. 50%. henry ford and others, they were building up these companies, which were tremendously innovative, and it felt when it lost its way. as a nation, we have to make sure we do not lose our way. this issue of talent is central. any organization is only as good as its people. people say that all the time. it is a truism of management. in the global battle ground these new ideas and companies and industries, winning the talent battle is critical. we win half the battle now. over half of the people coming to our great research universities all around the nation are from other nations. they are coming here to get a great education. the tragedy is once we give them

this great education, all too often we kick them out, force them to go back to their countries. they want to stay here in many cases. they are forced to go back. the create companies there to compete with companies here. it is insane. we have to do something about that. let me tell you my frustrations with why i do what i do, being an entrepreneur and investor. i have great respect for mark, leaving that role, that a messy world of politics -- messy world of politics. we were talking about a high- school emigration, stapling a green card to ph.d. and masters for at least a decade. i am sick of talking about it. we have to do something about it. if we do not do something about it quickly, we will lose the talent battle. one of the statistics that mark was telling us, 1/3 people starting companies in the

virginia area, half are in silicon valley, but it has dropped 10 points in the past decade. we are starting to lose the battle. if we do not move quickly to reverse the trend, that will continue to slip. these people are not just going away. they are going to other places to create other companies. as more people go away and those entrepreneurial ecosystems start building up, those nations are going to become more of a magnet for talent, capital, ideas, and the genie will be out of the bottle. it is time to come together in a bipartisan way, had people like senator warner who are willing to work together to forge a consensus on this issue. there are some cats forward. -- paths forward. immigration needs to be less of a debate about a problem and

more of our recognition of an opportunity that if we are successful in navigating these waters, we will be extremely well positioned as a nation. if we do not, we will be in really bad shape. >> i think is probably obvious by now that this is not a debate. [laughter] in the interest of the playing doubles advocate, let me ask a few questions. president sullivan, you talked about a 60% increase in applications to the university of virginia, driven largely by chinese students. what are the appropriate limits on foreign students in a public university, or admitting them into the country? how do you decide what the appropriate and optimal limits art? >> at the undergraduate level, we have as a bit -- we have a serious obligation to the commonwealth. 70% of our undergraduate students come from commonwealth

of virginia. that means anybody who is international, or from one of the countries outside of the united states, they are competing for the other 30%. the undergraduate student body has risen very slowly because we have lots of competition in that pool. particularly in the graduate applicant pool for some stem at fields, 85% to 95% of your applicant flow may be international. if you are going to have a full- sized graduate class, you'll have international students. it is particularly true in the injured -- in engineering. engineers with lower levels of a degree qualification are in such high demand in united states, it is hard to get them to hang around to get an advanced degree. a very common experience in the chemistry department -- american students, and, they start to study for a chemistry ph.d., and

she finds out that with a master's degree, she can make a very good living. the phd plan is abandoned, and instead, the master's candidate goes to industry. that happens over and over again. foreign students come here, they will stay all the way through the ph.d. program -- they cannot get that job. they want to complete the reason they can the united states. we have a high completion rate among foreign graduate students and relatively low completion rate among american students. it is not that american students cannot do the work. it is that they have intervening opportunity which four students do not have. >> center warner, you made reference -- senator warner, you made a reference to the failure of the education system to produce more stem students. shouldn't the focus be on fixing

that rather than bringing in people from overseas? >> you have to do both. there is a short-term problem and a long-term problem. what, also add, we do, 30% of undergraduate students in virginia, it helps with enormous diversity, it helps with national ranking. it helps to subsidize the cost of the free conscience money. when we were governors, we put more money towards our state university system. this is a problem that has been growing. i remember in the 1990's, i was chair of the math and a side collision in virginia. at that point, literally, 45% of our middle school math and

science teachers were not qualified to teach math and science. even at that point, you could go out and get a better job than being a teacher teaching math and science. what we have is a longer-term problem, i say this as a proud father of three daughters, all three of which are about in the. middle school, they're losing their interest in math and science. you look at the same trend in terms of children of color. there are a series of issues from that and science and not being -- not being taught in the most innovative and interesting ways. i think it goes to what kind of role models there are. not having the corporate support system. it is not a new problem. data is quite frankly getting worse going forward. that does that question, yes, we

need to reform our education system, particularly focus on middle school years, but we also have to recognize, as steve mentioned, one of the opportunities and challenges of the internet is that that has made space and distance and time disappear in terms of the exchange and flow of information. you can build it anywhere. if you can build it anywhere, that means america's international companies put footprints everywhere, and they can choose the microsoft's and googles, where to locate. if they do not enough talent, they will relocate. they are being trained at our universities. oftentimes the case is that they're not going back home. they're just driving north to toronto and looking at places like canada where there is much

easier immigration. >> there are people that say that the problem is not that you cannot get the talent in the united states, but that it costs more and that this is about a less expensive alternative. >> no, i do not think that is true. i think it is also worth putting this debate around high skilled workers, particularly stem graduates and advanced degrees, in a broader context. the legislation that senator warner introduced, the startup act, and basically created a stem visa. we had 300 million people in this country. the issue of immigration and more broadly that is hotly debated, and hopefully there'll be some resolution sooner or later, about 11 million undocumented people in this country. the dream act would affect about

1 million people were up 1.5 million -- or about 1.5 million people. the data suggests that they are job makers instead of job takers, in terms of what they directly duke and the companies they create. they've ripple into the cup -- into the communities. it was not just that a well -- aol was recruiting people, but we were creating jobs for people. from construction to restaurants -- it was a broader ripple effect in the community. it requires people to take that idea, start with three or four people, then 300 or 400, and one recent example that shows the importance of immigrants and the connection with immigrants and entrepreneurialism -- i should

mention that almost half of the fortune 500 companies were started by a first generation americans. i'd be known how we lost the manufacturing system. seven years ago, there was a bankrupt factory in upstate new york. an immigrant bought it. he said i will figure out some way to use it. seven years later, he created a company that has hired 1500 employees and will do $1 billion of sales. it is the number one logar brand. seven years ago, it was a bankrupt factories in upstate new york. -- numbver one yogurt brand. seven years ago, it was a bankrupt factory in upstate new york. >> the impact more broadly is

pretty significant. >> you talk about how countries around the world are trying to copy that secret sauce of america's innovative society. do any of you see any indication that the united , from its great research universities or to people who want to start companies, that the united states has lost any of this appeal? >> absolutely. the university may be different, but as it relates to the entrepreneur ship and creating companies, absolutely. that is not to say that we do not have a lot of things going for us. to suggest that there is not robust entrepreneurial ecosystem developing in many different countries is just not accurate. one fact that should be scary is that there is a venture firm,

xcel partners, that back facebook -- all of their venture investors were silicon valley. now they have more venture investors in china than they do in silicon valley 10 years later. why did they do that? they believed the opportunity is there -- opportunities there are significant. they think there are more opportunities there than they are -- then there are here. >> i would say that there have been other countries that have expanded their opportunities. there was not much chance to go back home 25, 30 years ago. we have and flattening the globe. it happens. there is a free flow of capital and ideas. i still would not try our position for anywhere else in the world. we still have a stronger

university base. we still have with our challenges more access to capital than anywhere else in the world. we have an entrepreneurial system, even though some complain about the royal dick the level of regulation, it is still robust. -- even though some complained about a level of regulation, it is still robust. not every idea we originally thought of in america. we used to have such an enormous advantage in every field that we had the ability to look inward and think our ideas were always the best and not worry about competition. now we have to worry about the competition. i think we will step up to it. i think part of this is around this immigration issue to make sure we continue to revitalize ourselves, which is what -- which is what immigration is about. this is not the first time we have grappled with immigration.

>> president sullivan, how about universities? >> cannot think american universities will be in the situation at detroit found itself in years ago. we have a series of competition now. -- serious competition now. other countries are investing quickly in their universities and a lot of money. in china, at the same time we are not investing in public education, they are investing heavily. if you walk through chinese university, you'll see an amazing, huge, brand new laboratory buildings. they do not have people in them yet. they do not have the human capital. they put the physical capital in place. the day is coming when those new ph.d.s that are graduating, even all they could stay in the united states, there will be a job in china instead. the day is going to come when we

are facing serious competition. europe is not being sanguine about this either. the european research universities are working hard, looking for ways in research areas where they can come together and they can have a synergy in which the whole is greater than the sum of its parts. that overlooks the national boundaries and finding ways to overcome the national boundaries. >> let me add one other point. >> the senator rules, am i right? [laughter] >> this comes back to my obsession with the debt and deficit. one of the challenges is that any business invests -- any great business that invest in their work force -- invests in their work force does best.

we have cut back on our public investments. the plan passed by the house of representatives would cut federal spending on all domestic items around education, infrastructure, and a workforce turning to less than 5% of our total public spending. we can argue about the politics of that. that is not a business plan anybody would invest in if you are going to compete. >> one other point that is worth pointing out, if right now our universities were 100% people that were born or raised in america, 0% of people from other countries, and somebody proposed opening up the world, and said, let's have a target that someday half of the students getting these advanced degrees should be from other countries, the proposal would have been like the military service proposal. you have an obligation to serve as the country. if we are going to get educations, then nobody would

say, let's take half of those slots, given to people of other countries, give them educations, and then we'll take them out to compete with us? no. that is what we have put in place. i do not propose that we require people to require people to stay and surf, but we should make it easier. -- propose that we require people to stay and serve, but we should make easier. >> before i go to the audience, i want the three of you to take out your crystal balls and tell us, the next 12 months, what is going to happen on this issue, steve? >> i am optimistic. i am cautiously optimistic. it goes back to what the senator says. the startup bill passed with broad bipartisan support in

congress. they came together on that legislation because it was important for entrepreneurs to get extra capital. even though it was election year, something did get done. it is because people recognize it was important. the good news is that people recognize that the issue is important. there is a general agreement on the solution around high skilled immigration. the problem is the politics of entrepreneurship and innovation and the economy and jobs. this has all been trumped by the politics of immigration. and onee four paths, was the stem jobs act. it will not be taken up in the senate. there is a diversity lottery, it would result in raising the overall level of emigration. if there was agreement to include that, potentially, that bill could be passed.

i do not think that is likely to happen. the second option is what the president has indicated -- to link high skilled immigration and the provision of the startup act to the dream act. it is a broader solution around emigration. the third would be to say -- this just deals with the 50,000 -- the third would be to say let's deal with comprehensive immigration reform. the 11 million people, which we have to deal with clearly, and there is a desire more than there was a month ago to do that. even president george w. bush talked about taking up the issue and he called for a comprehensive solution. that is the third. the fourth path would be to say that this immigration pass is challenging and to build support for senator warner's bill. it would link immigration to

regulatory issues, commercialization of research -- if i had to bet, i think something will happen this year. i think it will be something, either number two or number three. it will link to the dream act or republican version, the chief act. or perhaps it is comprehensive immigration reform. i do worry, even though that is a problem that we have to sell, that it gets pretty complicated, and the more complicated it gets, i am sure it is harder to get down. any one of those forecasts would be possible. i am optimistic that -- four paths would be possible. i am optimistic. >> i am optimistic too. i think there is an 80% chance that we are not going over the fiscal cliff. [laughter] i cannot think there is any chance if you look back at the

history the immigration lottery system, which you will find an awful lot of those american entrepreneurs, they came through that program, and this notion that there will be a trade-off, it is like pre-election. that was the political reality then, but not now. the change on election day was these items like startup 2.0 were challenging to get republican colleagues to come along. now everybody supports that. it was the starting point. the dream act, which i think it was an embarrassment that we do not pass that already, as somebody who lives in a commonwealth where i see many kids who grow -- who grow up in virginia, went to virginia schools, parents have paid taxes for years, and in the process of

trying to continue their american experience -- we luckily were able to overturn tried to exclude those from going to college. that i think becomes now trading at a given but it sure as heck could be done fairly shortly. the challenge is now going to be, because there are these 11 million undocumented persons, who overwhelmingly work in america, try to sort through some at the legal status. i think that has got to be a national priority. the items of what could have passed before -- there has been a seismic shift. i think rightfully so. people say that we need to do more. not just deal with high skilled, not even just deal with those kids who have lived here for years, who came here with no choice of their own, give them the path to serve in the

military or get an education. >> better than a 50% chance that you get a comprehensive solution? >> i hope so. i think there are some rightfully say, it will be the subject of a lot of debate and discussion. we will need the scholars and the folks in the audience to help us think for this. do you take this through a series of legislation pieces? do you do it through a comprehensive measure? those of the questions going forward. >> i think it is hard to take an issue on which a lot of people agree and get a lot of action on it unless there is trust that a lot of the other issues that may have less consensus -- have trust that those issues will also get addressed. that is one of the reasons why comprehensive immigration reform has been attractive to ensure that all of these issues get addressed at once. or, it is a reason that the senator's bill is attractive

because it sees immigration in the context of other innovation issues. i want to pose another way that you could do the highly educated immigrant as part of the larger issue. that is -- [indiscernible] what i see happening in many of the states, it is completely renewed interest and why american students are not doing as well in the stem fields as you might expect. while we do not have our graduate schools full of applicants coming to american schools, in stead -- instead of a foreign applicants. i would not want immigration reform to become a substitute for our continuing to focus on our own problem of getting american students excited and interested in science and engineering. if we could cut the attrition rate of the freshmen who began

in science and engineering, if we can cut that by 25%, we could meet many of our needs in the united states for stem workers. i think it is important that we have to trust that if we do address the high skilled immigration issue, we do not do that as a substitute for looking at all these other issues that still need work. my question -- your question and up being cut to a trust that congress will do something? the track record is not too good. >> one thing i want to say in response to senator warner to i agree with almost all the time, i want to push back on one issue. he said the election was a seismic shift. i think it is important that both sides do not overplay their hands. i certainly understand the position of the democratic side is that president obama won election, by a pretty significant electoral margin, and also if you look at the

data, the reason for that predominantly was the latino vote. indeed, i saw one statistic that if mitt romney had gotten the same percentage of the latino vote that george w. bush got, he probably would have a won. that is the case. you have to get it right with this demographic shift. republicans have to move quickly to compromise. democrats basically can hold our line and say, our way or the highway. i have heard that view. there is another view that on the republican side what you hear is that the president did win, but 48% of people did not support him. the house is in the control of the republicans. most of them -- unfortunately because of redistricting, which i think is an unfortunate dynamic -- most of the house

members will be punished if they moved together and compromise. there is a recognition of what needs to happen, but it is going to require some genuine good will, trust, negotiations on both sides to come together for some common purpose and solution. if both are saying, we have to compromise, and others are saying, over my dead body, we're not going to raise the overall level of emigration or we are not going to create amnesty or some of the things that you hear, i think you'll see estimate. it will require create -- creating some common ground. it will require people like senator warner who celebrates -- who celebrate compromise. >> two quick things -- i think that there is a much more alignment.

the business community has been for comprehensive immigration reform for a long time. perhaps not as forcefully as i wished they would have been, but still, there is no doubt, they want to have a rational guest worker program. one part about comprehensive immigration reform that may be subject of a future miller center discussion is that i do not think we will get comprehensive immigration reform until we have -- and this is a challenging issue -- a thoughtful question about identity validation. that pushes issues not only around emigration, but issues around homeland security, electronic medical records, and the sooner that we get awful about that,-- thoughtful about that, and have an employer or and -- or employee being able to check the legal status of

working, that will push us into a comfortable conversations across the political miles. -- aisles. >> questions, please identify yourself. >> hi, my name is lawrence. thank you for taking the time to speak to us today. a question is, given the issue of outsourcing, what impact do you think it has on immigration policy? >> i think that -- a lot of the original outsourcing was not driven by immigration policy but by differential -- differential costs in labor. one of the hidden stories is that those differentials have come down and america is much more competitive than it was even a decade ago with low and mid skilled jobs.

one of the challenges with our current policy is that companies that have a global footprints, if they cannot hire a high skilled individual that comes out of an american university, but they can hire them in india or china because their return there, they will be able to do so. it is tied into this high skilled immigration question. >> i will add that technology has created more advanced automated factories. that has resulted in fewer jobs being necessary to build products. there is no question about that. that is a negative in terms of job creation. it is also a slight positive. we have seen a little bit of a trend, not dramatic, and we saw apple announcing that they will make one of their products in the united states. there is probably some political calculation there. if you need your people to make

this up, then the cost differential to make it. versus making it their diminishes. the argument becomes more, maybe we can make some more here. number two, there is a whole council that focuses on advanced manufacturing, particularly additive and manufacturing. it is an interesting area. over the next decade, it has the potential to have much more personalized approach as, more qassam approach is to manufacturing that could result in more things being made here as opposed to being made other places. it is a concern. people are a little bit more optimistic than they would have been a five years ago because some of the technology advancing, which people used to in somea negative bi, and sectors, it is becoming a positive. >> hello, i am a reporter with

quote computer world." , for this excellent panel. my question is for senator warner. -- with "computer world,"." thank you for this excellent panel. my question is for senator warner. excellent technology workers have continuing pressure on other jobs. a lot of jobs had been moved overseas. those job losses have and facilitated by -- have been facilitated by a visa. will you raise the cap or do away with the cap? what we do to protect i.t. workers. from having their jobs going overseas? -- i.t. workers from having their jobs going overseas?

>> we have talked about a peace -- about a visa -- the current h1b totals are not appropriate. part of what i believed about driving i.t. jobs back into america, one of the things i think we have done a purely dreadful job on is finding the mid-tech jobs that could very easily be located in rural america. the push back against some of the immigration and changes and about the transformative change brought about by the information age is that rural america -- we have not done a good job of building it in martinsville,

virginia. i think there's a good chance around mid-tech jobs. the final category, the one i have talked about, the entrepreneurial visa, it would be a spinoff from the h1b, those that are captive to the company, the path to legal status in america, it would be the ability to raise independent capital and hire additional americans. in it of itself, that would be a job creator and a job creator of americans. >> a question right here. >> high,-tom, from virginia beach. i think the most -- hi, my name is tom, from virginia beach. we have been successful about

talking to companies about opening up for entrepreneurialism. we have gone back to india now because we have been a successful in opening up their markets. the other issue is china. we need to keep chinese people here, because when they go back, they will compete with us. timing i think is everything. we need to get this going. we need to get it now. there is perhaps an important point in dividing the visa issue from the general immigration issue. one can be dealt with much more quickly. any comments? >> that has been my view for some time. because of the urgency around an entrepreneur should and innovation, moving quickly to move up with high skilled -- to deal with high skilled

immigration is important. i have been a very supportive of what senator warner has been trying to do. if there was a consensus in the congress, and with the white house, to move on that, i would be delighted. my own assessment is that that is unlikely. unless there is a broader solution around immigration, it does not have to be everything, which is why it might be piecemeal, my own guess is that -- my day job is investing in companies, this is just moonlighting -- my sense of it just talking to people, is that probably at this point, in order to get traction, there probably needs to be a broader discussion on immigration.

>> a question right here up in front. we will do that. then right here. then a question right over here. >> am i up? i am an immigrant. i am from zimbabwe. i am from zimbabwe. i have been here about 13 years. trying to get a green card. my question really is, i feel like i am in a choir practice. we are singing the same hymn, and i feel that the immigrant as a brand has kind of a bad brand of the united states. my question really is how do we change a brand of immigrant and make it more positive, because i think that will enable legislation that will get all of

these things we are talking about to get them done. i have been here 13 years. i have never had anybody say anything negative to me personally about being an immigrant, but i know that the immigrant brand is not so popular. how do we change this so they know that immigrants are making a difference? >> you thought it was from greece. >> exactly. i had no idea. all of these companies, and maybe it needs to be like a marketing campaign, i do not know, but something i think should be done to change the image of immigrants and make it more positive, and i think that would facilitate everything we are talking about today.

how do you guys think we can maybe change the image of immigrants and make it more positive and not make it back when everybody thinks of immigrants, they think of border wars? >> well, at different times and places, immigrants have been viewed more or less favorable in the united states. this is a nation of immigrants, but when immigration was largely cut off in the 1920's, a lot of americans became estranged from the immigrant roots of their forebears, and we lost a sense that we are a nation of immigrants, but we see an enormous economic vitality that comes from a reverse and active population that attracts immigrants and the kind of this, as they add to a community like northern virginia or southern california or texas, where i spent most of my adult life. i am not sure it is true that

everyone has a negative attachment to immigration, but on the other hand, the conversation about undocumented has cast something on immigration. united states as well as europe and many other countries, including china, looking at our current demographic situation, we will turn to immigration because our fertility is approaching at or below replacement levels. we see this already. china has been looking at the fact that their one-child policy is leading to an older society. immigration and becomes another way that they can continue the economic vitality, said to me, immigration and vitality are closely linked, and i think that

is many true -- true for many people in the united states, not so sure about politicians. >> reminding people that the story of america is the story of entrepreneurship, and that is also a story of immigration. some of the most iconic companies. it is not just a recent tech phenomenon. i believe the reason it is so controversial measure and sensitive and emotional is the debate around immigration is really a debate around illegal immigration, and there needs to be more focused on legal immigration and thinking less about the problem and more about the opportunity, more about economic opportunity, and then refraining it to make sure that we and the people here who can not just start companies but the next industries that are going to drive the next century. >> a question right here and then here and then in the back. >> jeffrey.

>> i am an immigrant, a naturalized citizen, and i started my own company. my question is we talk about immigration coming year. i think one of the questions i want to ask the panel is about the unknown immigration, because with the policy that has been set up, we have many universities that are setting up outposts, taking the talent pool of our professors and science leaders and spreading it throughout. since mahomet cannot come to the mountain, the mountain goes to mohammad. there is a tremendous amount of research projects that are being built and created. you talked about labs that are built and ready to go. it is worse than that.

they are basically offering superstar professors double the salary, everything they want, and plus, if you are in the medical field, anything you want to do to make sure that -- they have different laws than we do. my question is if there is a technology drain, in terms of the u.s. laws, we only prohibit certain types of technology that has to do with national security and technology, but when you talk about in steve's case, it innovative things that are basically getting sucked out all along with that, nobody really talks about that. so i would like to hear from you. >> it is true. exactly what you are saying is true. other countries are stepping up their efforts to be a magnet for talent. some of it is professors, some

of it is researchers, and there is no doubt. we just have to make sure we are aware of that. people want to come here and get an education and want to go back to their country, fine. it is a way to build centers of innovation and entrepreneurship in other parts of the world. that is actually part of our state department stated policy. having people come here, if they want to go back and start companies there, that is fine. but we should at least give them the option of staying year. if they want to go back, fine. but do not make them go back. people staying year, working on these technologies, these industries. we are not going to grow more than 2%, our current growth rate, unless we innovate. we are not going to get unemployment down significantly unless we innovate more. almost all of the net jobs in the past 30 years are created by

young companies. >> right here, second row. >> thank you. my name is ed bell, and i am a proud father of a child at a great institution. online education. connectivity, the internet, education. there seems to be a trend towards greater access to education, making the great institutions we have in this country available to people throughout our country and throughout the world, either inexpensively or in many cases for free, and this creates in

some sense a competitive landscape force across the world where we are actually educating our competitors without even requiring them to come to our country, and i have two questions related to that. is that a concern that should be factored into the conversation around education, and two, does, if we are creating competitors across the world, do we look at ideas like steve suggested in terms of encouraging people we educate here to stay here, extend that to, say, people who are educated across the world, encourage them to come you're so we are not creating competitors that then we have to deal with ourselves. >> so i think one area there that people have been interested in is the massively open online courses. the university of virginia will begin offering five of those, and at last check, 120,000

people registered, and most of those people are outside of the united states. at the same time, the people will not be getting a transcript, but they are interested in the knowledge. our faculty will learn to teach in this way because we believe our students learn differently. it does not really matter so much that the student is inside the united states or outside the united states. we're interested in what the educational interactions are, but you raised an interesting point. i think that is true, and it will offer a lot of people the opportunity to learn, and this is really interesting, more interesting than i thought, and i hope that one outcome is for people who have not sought a college education -- a school that has an excellent

undergraduate experience with a four-year degrees, we think that education is much more than sitting in front of your computer screen and during the course on line. we think the education is much more than that, and that justifies your moving to a place where you are to get a 24/7, where you are there with others, not only inside the class but outside the class. there is more going on in the educational experience. >> if you do it from shanghai, you at least have to plaster your apartment with pictures of thomas jefferson. the last question is all of the way in the back. >> stanley cook, a uva alumnus, so in a way, i hate to bring up this point. there is some dissent of their.

one, not exactly a bastion of conservative open borders, "the washington post," and i particularly direct this comment to steve and suggest that he ought to have some conversation with "the post." they put out a major article, and this was the headline, and i will give you a short quote from it. "you ask for more scientists, but the jobs are not there." i did take the opportunity since my agency has a few scientists to interview, and they said, what is your opinion? why are we here?

we are here because the jobs are not in the private world. the second source was organized labor, and the public relations person said, "we agree with "the washington post." there have been many predictions of science shortages, said the editor of an online magazine, a "science careers," and yet, it seems awfully hard for people to find a job. anyone who goes into science expecting employers to clamor for their services may be deeply disappointed. >> steve? >> well, i do talk to "the washington post." they do not always listen.

i do not recall seeing a particular article, but, first of all, there are tons of jobs. when we talk to most companies, they are desperately looking for skilled workers, particularly with engineering degrees. there really is a problem there in almost every industry, and, ultimately, it comes down to entrepreneurship. it comes down to people talking about the business of the private sector. there is a small business sector, a restaurant. there are a lot of jobs created by that sector. there is a big sector of fortune 500 companies, a lot of jobs there, but the growth in jobs in an innovation are these young companies, and they do require skilled workers. "it -- living social had four

people. their challenge is hiring smart people. the last point is people focus on technology like it is sort of an isolated in the street, and like silicon valley becomes a proxy for it. almost every company now is a technology company. walmart is heavy using technology. and dormer, a heavy using -- user of technology. we need these not just for technology companies, but every sector has to be more innovative, and engineering is a skill set, and their biggest challenge is attracting enough talent while other people as well as other nations trying to disrupt us are stepping up. >> so this has to be a compelling topic. otherwise, you would not have this kind of crowd on a friday

night. either that or you have no other alternative. but we are going to give the final word to our host. >> thank you. and i want to thank our distinguished panel and moderator and to thank all of you for attending this very robust and engaging discussion tonight. the politics, economics, and the legal ramifications of immigration. in his first post-election news conference, president obama stated that he was, quote, a believer, that if you have a ph.d. in physics or computer science who wants to stay here to have a business here, we should not make it harder for you to stay here. we should make it easier for you to contribute to this society. it is our hope that with the endorsement of both parties,

policymakers will take steps to a net substantive reforms that will help make this possible in the years ahead. for our part in the coming weeks, we will work with some leading academic journalists in the field to publish the papers from today's conference sessions. please be on the lookout for more information about this publication on our website. you'll also find audio and video of this conference. and on the website, i might add, as a matter of personal privilege, you will find out of focused and wide ranging our non-partisan work is on the subject of the presidency, political history, and policy issues of importance to the governance of this country. on behalf of the miller center at the university of virginia, thank you for being here tonight.

we are adjourned. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> explores the history and literary culture of albany, new york. on c-span2 and american history to be on c-span3 it. next, speaker john boehner and minority leader nancy pelosi on the so-called fiscal cliff negotiations, and then poll results on what americans think should be done to spur the economy. tomorrow on "washington journal,

" a journalist for "u.s. news and world report" talks about the state of the economy. and then the director of the national institution of allergy and infectious diseases, and the director of the centers for disease control and prevention examines the state of america's public health. "washington journal" live at 7:00 a.m. eastern on c-span. >> the supreme court will look at what was passed in 2008 by a majority of six-three, i believe, and they are going to say that is president, and voter i.d.. >> this is where we tell them about facts. on the indiana case, it was constitutional for them to establish identification. they did not say that all of those states -- >> let me finish. you misrepresented what i said. it is a lot of the land.

>> when i hear these accusations that black people, voter a dedication laws disproportionately affect minorities because -- it implies to me that we somehow come something missing in our brain. if white americans can get identification to vote and go through all of the processes to follow the laws, what are you telling black people? that somehow they are not good enough prove that they are lesser than proof that is what bothers me about a lot of the rhetoric coming from democrats and the left, that we always have to make special, you know, there always has to be a specialist -- specialness to deal with minorities. they are feeble minded. we have to make concessions for them because they cannot follow the rules like everybody else, and when you treat people like victims, i do not think they want to aspire.

>> sunday night at 8:00 on c- span's "q&a." >> house speaker john boehner said the white house has wasted another week of negotiations on the so-called fiscal cliff. disagreements on taxing the wealthy remains one of the sticking points between the two sides. this is about five minutes. >> good morning, everyone. this is not a progress report because there is no progress to report. when it comes to the fiscal cliff that is threatening our economy and threatening jobs, the white house has wasted another week. eight days ago, secretary geithner kaine your to offer a plan that had twice the tax hikes that the president campaigned on. it had more stimulus spending than it had in cuts, and it had

an indefinite and infinite increase in the debt limit, like forever. four days ago, we offered a serious proposal based on testimony of president clinton's former chief of staff. since then, there has been no counteroffer from the white house. instead, reports indicate that the president has adopted a deliberate strategy to push our economy right to the edge of the fiscal cliff. instead of reforming the tax code and cutting spending, the president wants to raise tax rates. even if the president got the tax rate hike he wanted, understand we will continue to see $1 trillion deficits for as far as the eye can see. washington has got a spending problem, not a revenue problem. if the president does not agree with our proposal, we believe he has got an obligation to families and small businesses to offer a plan of his own, a plan

that can pass both chambers of the congress. we are ready and eager to talk to the president about such a plan. >> you spoke with the president this week. how do you characterize that call? also, we understand that he is making clear that it will have to be increasing rates for the wealthy or no deal. are you willing to give a little bit, if not all of the way to 39.6? >> it was pleasant, but it was more of the same. just more of the same. it is time for the president, if he is serious, to come back. >> they indicated unemployment is down from this time last year. no deal is going to happen, that could hurt american jobs. why take such a risk when the

job numbers are improving? >> increasing tax rates will hit many small businesses, will create 60% to 7% of new jobs in our country. that is the whole subject year. violating all of the rules. >> the president was absolutely prepared to have the economy go off the cliff. >> i think that is a reckless talk. >> to be able to prevent tax hikes on all americans, that taxes are not going up? >> raising taxes on small businesses is not going to help our economy, it is not point to help those seeking work. i came out the day after the election to put revenues on the table to take a step toward the president to try to resolve this. when is he going to take a step

towards us? >> to agree to tax rate increases and protect small businesses at the same time, maybe going with 37%. >> there are a lot of things that are possible, for the revenue the president seeks on the table. insisting on his position, insisting on my way or the highway. that is not the way to get to an agreement that i think is important for the american people and very important for our economy. thanks. >> following the speaker's comments, house minority leader nancy pelosi called on the house republicans to approve an extension of middle-class tax cut. this is 10 minutes. >> just barely morning.

good morning. this morning, we received the encouraging news that the economy had added 146,000 jobs last month. the unemployment rate fell to 7.7%. it is the 33rd consecutive month of private-sector job growth. our economy is moving forward, but it could be growing at a faster rate. if the republican leadership had passed some of the obama job initiatives and passed the middle-income tax cut. having done that, held of those initiatives, speaker john boehner says democrats are walking the economy to the fiscal cliff. yet, this is the same republican leadership that had the house and senate barely a full day

this week. we have had the election. the president was clear in the campaign in fighting for a middle-income tax cut, a tax cut which, by the way, gives everyone a tax break, but it also asks the upper 2% to pay their fair share. and since that election four weeks ago, we have had time, the president has given republicans flexibility to come up with a credible, specific plans. what they offered in return was an empty letter, lacking in specifics. it was a manifestation of a lack in the republican caucus about the tax cut and no specifics in their planned, and not even senator mcconnell endorsed the plan.

we can make a difference right now, by putting the middle- income tax issue up for a vote. democrats are unified on it. we have been discharged position to bring it to the floor. the only obstacle standing in the wake of middle-income tax relief is the republicans'' unwillingness for the top 2% to pay their fair share. this continues the tax cut. the clock is ticking. christmas is coming. the goose is getting fat.

the facts are very important to reiterate. the democrats have cut its to $1.60 trillion in cuts, in spending cuts. we have already agreed to the affordable care about, over $1 trillion in savings in medicare while extending savings what is lacking are the revenues. deficit-reduction. what does reduce the deficit is jobs. job creation. what we need are the revenues, and that is what you have to ask the question about. why are we not hear to pass additional tax cuts which increases the high-end

contribution to the budget talks? why are we not here to pass a middle-income tax cuts? what are we not even here to debate the middle-income tax cut? can it meet because the republicans are holding this as they have all along hostage to tax cuts for the wealthy? as long as they will not touch one hair on the head or get one red cent of their rich, to reduce the deficit, to create jobs, to grow the economy, to improve the lives of the american people -- >> the speaker was asking about middle ground.

do you necessarily rule it out? is it your understanding that that is something he would accept? >> what we want to do is protect the middle class. is not above the rate. it is about the money. the objection to extending it is about being punitive to the high end. it is about getting money to reduce the deficit, to grow the economy, into a new leash that our, so, again, it just depends on how much money you can get. to get them to pay less of the middle class pays more. >> requisite revenues? >> i do not know that. that is why we should be here to make that kind of a review of the facts. but the facts are at this point

this does produce the revenue, and the differentiation with the limitation on deduction creates a great deal of money as well. it is a differentiation between 28 and 39.6%, and that brings in more and $0.60 trillion. >> the president spoke with present -- with speaker boehner on wednesday. when was the last time you spoke? are you satisfied with what is going on between your office and the white house? >> yes, i am. i do not keep track with every time i speak with the president, but i am very satisfied. and the staff. and chris van hollen, his communication with the executive

branch, the president knows our views. he shares our values. we feel confident in any negotiation that he takes the lead in. >> there have been reports. are you disappointed so far? >> no, i am very happy about the discharge petition. it exceeded my expectations in the speed of which are members been here only a limited amount of time were to stand and sign the petition. the fact is getting people to sign, it is also about bringing pressure on the leadership to say why are you not bringing this to be for? this is a forever protection of the wealthiest in our country at the expense of the middle class. this decoupling is central to

solving the fiscal challenge we have now, and do not wonder yourself? i never seen a poll says 100% over mummeries support middle- income. the senate has passed it. the president is poised to sign it. why would they blocked that except to protect the high end? >> it is an institutional question. did you have any issue with given authority over to the executive branch? >> my understanding of what he is talking about is mcconnell rule, unless two-thirds congress rejected it, the president would think the debt ceiling would stand.

the white house and house democrats are on the same page. thank you. >> explores the history and literary culture of new york's capital city, albany, on c- span2, an american history television on c-span3. next, poll results on what americans think should be done for the economy. then, a pennsylvania representative on the so-called fiscal cliff negotiations. after that, a panel analyzes the poll results and the state of the u.s. economy. >> we have had these explosions in knowledge in medicine, and all of these services that we have end up having so many cracks that the cracks are as harmful as the diseases we are

treating, and you have got to step back and ask, are we hurting people overall? on a global level, what are we doing sometimes? we have got these reports saying that 30% of what we do may not be necessary in health care? when we step back, 30% of all the medications we prescribe, the tests we order? this is something which for the first time is really being called up as a problem. >> dysfunction in the u.s. health-care industry on what hospitals will not tell you. his latest is ", a chemical -- is "unaccountable." >> the invasion of japan without considering. it is estimated that the land

would cost 250 thousands of our youngsters being killed. >> as harry truman's grandson, i choose to honor both, both of the sacrifice of american servicemen fighting in the pacific and a little girl who died as the result of an atomic blast. what that must have been liked to be close to that where that fireball originated. >> follow the journey to hiroshima, sunday on c-span3, american history tv, talking to survivors in the inspiration of his trip. >> according to a new allstate

national journal opinion poll, most americans believe the country is moving in the right direction. now, from a media company, and a consultant, they discussed the poll results. it shows the top things on the american to do list as well as a sharp divide in opinion along racial lines. this is 30 minutes. >> good morning, all. good morning. i am john, a publisher of the group of publications. i want to welcome our c-span

audience just tuning in. this is the 15th all state- national journal poll that we are discussing. since april 2009, allstate and national journal and the atlantic have partnered in the surveying of the public opinion, a little bit oriented towards the middle class, this idea initiated by a man i will introduce in a moment and another and posed the economic crisis -- post the economic crisis. part of the notion over the years is, if you will, this would give voice to the american middle-class and public opinions about what is happening in our economy, therefore our

lives. we have conducted over 25,000 interviews, 25,000, over the last four years. there is a repository year of data which is really extraordinary which is available in several places, and i really recommend it to all of you as a database that gives a pretty good sense of what the public has been thinking and really give a voice, if you will, to the middle class. the survey that we are talking about has a different orientation to say it is more about what does the public want to see done as opposed to just what do they think. we were looking at there to do list. a public suggestion. let's get on with it and get some things done. not limited, as you discover, is worry about the debt and the

fiscal cliff. our program today, just briefly, others will talk, and we will give the polling results, and then a senior national journal member will have a panel discussion. it is a terrific day, i think. please turn these off. and, again, i welcome you. joan is the executive vice president of the country's largest insurance. you are in good hands with all state. joan has been a terrific partner. she is responsible of corporate relations for allstate. she did civil -- similar work with monsanto and others. she is a consummate marketing and communications strategist,

which is what washington is all about, so thank you very much and welcome. [applause] >> ok. thank you. john, for that introduction. the national journal has been a terrific partner in supporting our work and the challenges that the american middle-class has been facing during this great recession, and i thank them for that. many thanks also to end, who will take us through the polling data to date -- many thanks take us through the polling data today, as well

as one of his associates. we have a rich body of knowledge about specific issues, and now coming together with this poll, we have the american sense of what our to do list is as we move into the next administration and the next congress. important findings. when we began this polling in 2009, the financial crisis was absolutely still very much underway. the bailout. the stock market, as we all recall painfully, had dropped from 14,000 in 2007 to 6600 in early 2009. banks were shedding over $1 trillion in toxic assets, and homes were shipping equity, unfortunately, at an even greater rate.

-- allstll states's ate's mission is to protect families, we thought we could not just stand by when the american dream was being downsized for so many in the middle class, so our goal has really been over the course of no 15 polls -- of now 15 goals to give voice to the concerns of the middle class, in particular, in to help create a dialogue that leads to constructive change and action. if we can stimulate an advance a dialogue by our leadership class and public policy makers, that is really what this is all about, and i think as in the 14 polls that we have done, this one as well would surprise you in terms of results, so let me

just give a very top line of what ed will be talking about momentarily. a majority of americans believe the country is going in the wrong direction. there is infinitesimal trust in our organizations and political leadership together to solve problems. a large majority believes the middle class, becoming middle class in remaining in the middle class is becoming harder. it is more of a challenge, they believe, then it was for their parents' generation, and they believe it will be an even greater challenge for their children's generation. the level of collective pessimism is pretty high. we found that consistently. at the same time, and this is interesting, resilience in

person optimism inherent in most americans. there is a sense of resolute self determinism, which is characteristically american and has been reflected in all of these polls. most tell us they believe in the american dream and expect their children to achieve it, as well. come overwhelmingly, people believed in the free-market system, and they believe it will be their hard work and personal sacrifice that will make them aware of the american dream and get ahead. they will be the primary drivers of success or failure and not institutions that we had in previous generations relied upon. two things i just want to point out as we begin this conversation this morning, it looks like an even deeper degree of personal optimism than we saw in the previous polls. in one case, we asked with the

very serious challenges facing us, if they represent a turning point from which we will not recover, whether we will overcome these challenges in the foreseeable future as we have done in the past when we have been deeply tested as a nation, more than two out of three in this poll say yes, we will. a significant majority has told us they expect the next four years that government will deal effectively with their to do list, creating jobs, stabilizing social security, and improving education, particularly in kindergarten through 12 education, which the american public and this poll says is fundamentally an important for a competitive nation and for the success of our next generation. they want solutions. they are very hopeful.

but they want solutions. compromise. in this poll, as in all of our polls, a majority of both parties say their leaders should compromise with the opposition and get more done, even if it means accepting some policies they do not agree with, and that means even some policies around which they decided to vote for the presidential candidate of their choice, so consistent with everything we have been hearing and reading, they do rank debt and the deficit very high as a priority for elected officials to get done, compromise, and get to work, but they also made it very clear and made it clear in every one of our previous 14 polls, they want the debate to be connected to their real life, things they need to survive and thrive in this economy. the kitchen table discussion, if

you will, is very important to them. they want good jobs. they want effective schools. they want affordable health care. they like social security, and they want to retire in dignity. they do not feel that one has to embrace all of these priorities, but there is a framework here in this poll in this to do list. there is a framework that most americans believe will give their children a better chance at a better future, so people are not necessarily hopeful that congress can deliver for them, but they are wishful. they very much what congress, a congress, that puts them and their engine the first, so i will end with this. one of my favorite philosophers is benjamin franklin. he said you may delay, but time will not, and i hope congress

takes these findings to heart and moves ahead quickly to rebuild our nation, so with that, thank you very much. i am very excited you are here this morning to share the conversation. ed? [applause] >> thank you, joan, and i think the midlantic and the national journal for the opportunity to collaborate on this study and this series of studies. i am going to go through some numbers fairly quickly, so i would encourage you if your interested in this despite our body of work, this is our 15th survey, information which you can access online. part of our mission is to make information available to a large number of people about the way americans perceive this economic change and dislocation that they are experiencing. a point i will make before i

start off on this, we have in each of these polls, we focus on an issue and try to dig in a little bit. this one is above the to do list. naturally, it comes at a time when there is a new administration to take over, the president in his second term, a new congress about to be seated. we wanted to ask what americans want to see in their political leadership as well as business leadership, it to begin to address. you see these issues that we focused in on in each of the previous polls, and i hope you will find that data helpful to you to understand where the american people are. the methodology in this poll was conducted between november 25 and december 1. we interviewed adult americans over the age of 18 by a landmine and cell phone. the survey was about 1000 with plus/minus 3%.

we find this group of younger voters that participated very aggressively in the previous election has an interesting attitude an opinion about the direction of the country, and also, african-americans and hispanics for a total sample size of 484 and 195 and three under 29 respectively. we over sampled those groups so we could look inside of those and you could look inside of those and see some of the findings that we think are interesting. just keep things, there is an uptick and optimism right now than prior to the election. it actually began prior to the election. americans are more optimistic than they have been in years. this takes us back to about where we were in july 2009. they continue, as joan

mentioned, this very strong belief that america can overcome the challenges. this has been one of the broad all marks. in the depths of the economic crisis in 2009, what people were saying was some of the participants in meetings where we were showing our data, they were asking how we possibly have this optimism. this has been a tenant that we have found throughout this. -- a tenet that we have found the route. this desire for compromise. both sides, republican, democrat, independent, president obama, those who voted for governor romney, they want to see compromise. what they find as an acceptable compromise is very different. there is a notion that they want to seek their government working together. that is a strong point of view

right now, and that of is the create some opportunities. it bobbies the creates some complicated waters to navigate. the conflicting priorities issue. the single highest priority on the to do list is the budget deficit. people talk about this being a problem that they want to see addressed. they are very concerned about how that creates an economic environment that puts them at risk, but they immediately move, if that is table stakes in terms of taking care of the basics of issues, they then moved to things that have much more tangible meaning. they focus on jobs, wage growth, getting more disposable income into the household. ec at one level, the abstract, the debt level and the fiscal cliff and an immediate transition, where they would like to see effort. and finally and interestingly, all of this battery that people

have taken in the last few years of difficult economy, we will go through this question in detail, but we gave voters a choice. short-term, pragmatic solutions to fix the problem or long-term visionary policies that would put us on the right track, and interestingly enough, people are thinking longer-term, so part of that restored optimism is different in different groups, but generally speaking, people are looking for the longer horizon. just quickly, the mood of the country, you can see the track. it is still 50% that will lead the country is on the wrong track, but you see substantial improvement over where we were in the late fall of 2011, so that is when it really bottomed out. that was around the time of the debt ceiling. only 33% of democrats said the

right direction in december 2011. now, if you look at it, democrats are at 77%. if you move to the left side of the slide, what you see is while things have improved, they have not moved with those that identify themselves as republicans. republicans, 86% say it is the wrong track. this cut by racial identity, people who are caucasians, they are more negative and have been through the pole. the most optimistic are african- americans, followed by hispanics, 58% right track to wrong track. if you look at the obama job approval rating, it follows the same kind of harsh divide, if you will. he is now enjoying an approval rating that he has not enjoyed since early of his term.

54% approve. but if you look at the left side of your screen how this is polarized. 87% of republicans disapprove. there are those the independent in the middle. you still have this very polarized view of what is going on, but there has been a general improvement, and that has been largely from the independents coming back to the president. we also asked currently, do you approve or disapprove of what we just went through, any seen this. we asked that of congress also. do you approve or disapprove of the way congress is currently handling its job. only 21% approve. in the current time of this discussion, you can see some benefits obviously to the white house. and who do you trust more to develop solutions to meet the country's economic challenge?

the president has an advantage there a 48% to 32%. we then went to sort of how you see the economy forming over the next year, the economy over the next four years. again, 44% are saying that they expect to improve over the next year. 51% say they expect to see improvement over the next four years, so while there continues to be some concern about where we are, there is also some optimism, and thinking ahead to this time next year, do you expect your personal financial situation will improve or become worse. this is interesting. generally, the economy may have improved. there is a concern about how i

am going to do, this long, grinding period of either slow- growth or recession. again, looking at this by party identification, you will see that the most optimistic are african-americans followed by hispanics, and the most pessimistic, republicans most concerned about their situation. democrats most confident. 58% say it will get better. and then on the issue of compromise, this is a somewhat interesting slide. we asked should president obama compromise or remain firm, and 59% of those who said they voted for president obama said they want to seek compromise. there are those you characterize themselves as voting for mitt

romney, do they compromise or remained firm? actually it is a smaller amount that believes a compromise is necessary than the president's coalition. there is this great difference of thinking about four years from now, the end of obama's second term, by that time you think the economy will improve? 51% say it will improve, and 39%, and economic well-being of the middle class -- i have to catch up with my slides here. there we go. the deficit and that will improve is 34%. the one thing they are certain is taxes will increase and government spending will increase. in the next four years, how effective do you think the government will be on each of the issues? this is how it basically stacks up. insuring long-term future

entitlement programs, social security, medicaid, 65% think that what happened. 64% say creating jobs, 64% say improving public education, growing economy, and lowering the federal deficit falls down at 48%. not as much confidence there as there are on the other items. we then said the united states faces a number of challenges, including large budget deficits, national debt, slower economic recovery from the recession, high unemployment, and a deep political divide on many issues. do you believe we will overcome these challenges in the foreseeable future as we have done in the past do you think these are you a unique set of challenges that we might not be able to overcome this challenges?

2/3 of voters say we will be able to do that, 31% have concerns about that. if you look at the bars, the one the spike up, younger voters confident we'll get there, african-american voters, 85%, hispanics, 66%, and in those are the fundamentals of democratic party, 85% of democrats saying it will improve. which of the following a purchase the government do you think the president to take put it this is the short term, long term, a visionary approach focusing on long-term goals or a practical approach to addressing near-term challenges? 55%, you see people wanting a longer term visionary approach. if you look across the bottom at the different groups, this is most popular with the young, african-americans, hispanics, and again, democrats.

the longer term, this is an opportunity for a longer term view. then, despite the looming fiscal cliff, americans are focused as we say on that to-do list. what do you consider are the most pressing economic issues facing the united states today, jobs and unemployment, far and away, number one, 30%, followed by government spending, the budget deficit, and then back the wages at 11%? 41% saying he their wages or unemployment and then you see the government spending peace. if you look at how this breaks out by republican, democrat, independent, independent and democrats rank jobs higher than wages, and if you look at republics, they rank spending and the deficit.

when you go back to this idea of compromise, where are you compromising about? these are very tricky times in terms of creating a working coalition on that issue. compromise -- considering the challenges facing the country, which of the following actions do you believe will to the most to help the country improve? we read three separate purchase to this. the number one was growing economy and creating jobs through investments, even if that means continued deficits and tax increases. that was number one whit 42%, most popular with democrats at 62%. growing the economy and creating jobs through tax cuts, even if that means continued deficits and cuts to services.

that was the second choice at 29%. most popular with republicans, and reducing the federal deficit, even if it means both tax increases and cuts the service, least popular, and that was across the board with democrats, independents, and republicans. thinking about other actions that to be taken, which of the following would you believe would to the most to improve the country over the long term, the next 10 to 20 years? interesting here, making education more affordable and acceptable, and relevant to today's job market is number one, far and away, then promoting american manufacturing and industrial innovation at 17%, providing incentives to help people start their businesses at 50%. if you look at the box on the left, the education peace there, most important among democrats and independents, eliminating the deficit, most important with republicans.

while there is a clear winner, the profile who supports it is different. then we asked the people a question, to questions, what about the type priorities for washington and then for you. washington, as we look at the public policy committee, you see this ranking, and deficit caused by social security, good-paying jobs, education, and cost outcomes are the top four. the mean scores. to look at this as a scatter gram, who ranks number one -- you see deficit and debt by the young, also those over 50, by independents, republicans, and white households. look at the number one's on education costs and the outcomes, they are number one for democrats, african- americans, and hispanics. this is supported in the

minority community -- access to education is seen as vital in terms of their economic security. we asked that question about you. when we asked about you, it is about social security and medicare, retirement, cost of health care, price of energy, and education. when you move away from what washington should do, this is the to-do list. looking at that graph, the big bubbles being important, social security and medicare are most important to those over 50.

democrats and independents rank it at two, white households. look at the education affordability and outcomes are number one for the young, african-americans, and hispanics. what it comes to getting the country's finances under control, how effective do you think each would be in reducing the deficit and cutting the national debt? increasing taxes on american families who make over $250,000 per year was number one at 76%. reducing taxes and regulations, 73%. reducing spending on military and national defense, 53%. reducing spending on programs

that benefit the poor, 51%. reducing spending on programs that benefit the elderly, 34%. compromise is an interesting issue, but as you tackle it, it becomes complicated. that is a quick snapshot of this survey. we have some vignettes that will follow. some of the respondents, we got on video. ron has done that also in print. thank you very much. >> allyson schwartz of pennsylvania talked about the fiscal cliff and other democrats and republicans will reach a compromise before the deadline and other issues on the agenda. this is 45 minutes. >> thank you.

let me introduce the moderator of the program. he is the editorial director of national journal and the atlantic. he oversees the political coverage coming out of our company. he is regularly on cnn and major cable networks. he is the most astute analyst in washington political analyst. we have had changes in the program. jean could not at the last minute make it today. apparently there is a meeting going on right now. maybe it is productive. maybe not. but we do have congresswoman allyson schwartz from pennsylvania who served on the ways and means committee in the house and now the budget committee. she has become a really big

deal. we are happy to have you with us. >> thank you. jean was some of the way for a meeting which may or may not be good news on the fiscal cliff. i am hoping this is a little less than the panel i moderated last week. we were in the middle of discussing the general election when all the power went out. we are fortunate representative schwartz is able to join us, representing a suburban philadelphia vice ranking democratic member on the budget committee. i want to have a conversation in two parts to reflect the dual nature of the to do list a public presented in the poll. when you asked the most immediate challenge for washington, they do talk about

the deficit and the debt and get in the fiscal house in order. but that's not the full extent of the list. behind that are other concerns including education, retirement, good paying jobs. barry diller parties along partisan and racial lines about what people want to see focus on. let's start with where we are and where the public is. on the question of resolving the immediate fiscal cliff issues, how would you describe your feeling that there will be some kind of accommodation and deal either on the tax or spending sequester side or both?

>> good morning. i am not gene sperling. i am pleased to be with you and give you my perspective on where we are. i will start by something i often say when i am giving remarks in my district -- that i am struck with in my district in philadelphia. people of this same group no matter how partisan or how non- partisan the group is, people will say different things to me. they will say, i want you to go to washington and stand on your principles. do not give an inch. go and fight for us. i say, i will. someone else will say, i want you to compromise, find that middle ground, and get things done. that is the 10th time that has happened. that is what they hired me to do -- is to figure out how we do both.

it is our job as representatives in congress to fight for our values and priorities and principles we believe in and get something done. the divide that we are facing right now is -- i hope that all representatives understand we have serious challenges. we have created a moment where there are fiscal and tax policies that face us at the end of the year. we need to face up to them and move forward. make decisions about how we will the democratic position is clear. the president could not have been clearer during the election. elections matter. the president was strongly reelected. we picked up seats in the house. we picked up senators. democrats did. our principles are that we are willing to do spending cuts.

we have committed to $1 trillion dollars in spending cuts. how we do that should be discussed. we need other revenues. there is no math that adds up that gets us to dealing with reducing the deficit and getting to be able to pay down the debt and put us on a sustainable path going forward. we should do all those things. we have big challenges going forward to grow the economy. there is a difference of opinion about how we get there. >> secretary geithner said this week as directly as anyone as done on cnbc that the administration was willing to let the entire tax cuts expire rather than agree to anything that would extend the lower bush-era tax rates for those at the top. will house democrats have his back? >> we are willing to go to the mat on this. we are with the president on where we stand on this. we think the revenue from the top 2% -- it is a marginal rate. every american will get a tax

break on the first $250,000 on their income. it is a benefit to all americans. we are not asking that much in this context from our wealthiest 2% of americans to pay a difference of 4%. we are not asking for a 50% different. we are asking for 4%. it does not solve all of our problems. is that with the american people have said, ok no one loves their taxes going up but we are in a tough challenge. it is important to get new revenues in and spending cuts. we have worked to not go over the cliff. the economy and american needs certainty.

>> the unemployment rate goes down a little. do you believe the economy could withstand the effect of allowing the bush tax cuts to expire for all americans? >> that is not all of the discussion. the fiscal cliff and the amt did. that would affect 27 million american families and a lot of other taxpayers. there are other parts of this. when you hear about the concern about the fiscal cliff, it is not the tax rates. i do not buy that. i do not think we need to increase the tax rates. >> if you go over and the tax

rates go up, all of that goes away. >> we should not do it. we should resolve this. it depends on whether we then do something about it in the next month or two after it. we set ourselves on a path to do something within 30, 60, or 90 days and we are clear about that. people do not believe we will do it unless we do something. that is our worries. >> as part of that second stage, does the top rate have to end at 39.6? are there ways democrats can accept something in between bush and clinton if it was coupled with a reduction in the ability of people to take certain deductions or credits? would you see a top rate below 39.6 when the dust settles? >> i do not want to second-guess what we may decide. i think we should go to 39%. that is not what we should be debating.

i do not think it is instead of -- >> it is in addition to. >> yes. having that debate now suggests that that is all we have to do. most people who know over a decade we need to do more about it if we are serious about deficit reduction. we know we get it from spending cuts. we have already committed to $1 trillion. we believe it needs to be hard revenues coming in. there have to be investments for economic competitiveness and growth. we need to do them in a way that strengthens the middle class. this is not just rhetoric. it is how we to tax policy, invest, and deal with families who were worried about debt and

higher education and retirement. >> on the tax side, as part of the solution, do you think the gap between the way work is taxed and investment and capital gains are taxed, does that have to narrow as part of the final solution? >> i think so. yes, when you talk about capital gains going up at from 15% to 20%. some people suggest even more. the question about dividends is tougher because so many retirees rely on that. that differential is one of the reason wealthy americans pay so little. mitt romney is one of them. is that fair?

he thought it was fine to pay 13%. i did not think it was so great. if you get a check and you get salary, and you are paying more, it is an issue. >> on the other side of the ledger, they never released a napkin where they scribbled the ideas, all indications were in summer 2011 that the white house was willing to consider raising the eligibility age on medicare and changing the way cost of living adjustments were calculated. should those ideas still be on the table now that the president and speaker are in a room together? >> when it comes to medicare, medicaid, and social security, many of us think social security should be dealt with but it is not specifically part of the discussion. it does not have to be done right now. it is not in as much risk. when it comes to medicare and medicaid and health-care spending, we start on medicare

in making sure that we are committed to medicare. it is a promise we have made to seniors, current and future, even 54-year-old's and 44-year- old's and 34-year-old's. it is something we start with that promise to keep it universal and to keep benefits. once we decide that we will not ship cost to individuals, we have to focus on containing the rate of growth and costs in health care. medicare is a great way to do that. it affects the entire system for from private companies and individuals. we are trying to do that. implementing the aca is important in terms of delivery reforms. it pays doctors differently. it rewards quality. we should do that sooner than later. save those dollars sooner.

in those discussions, are there other ways that we can see revenues come in from within the health-care system? that is on the table. i am not keen on increasing the age on medicare. we have gone through a really big debate about finding a way to have all americans have health insurance. that is taking a group of americans and figure out how they afford health coverage. that shifts the costs of subsidies and they go into the exchange. does makes it more expensive for younger people because the older cohort is in that group? for medicare, these are the least expensive seniors we have. the most expensive seniors are much older. you have to look exactly at the consequences and whether that is cost savings for government and

families? >> the president had a firm statement this week to the business roundtable about the debt ceiling where he said, i will not play that game. he will not negotiate for conditions on raising the debt ceiling. how will that work? unless it is part of the agreement. does that need to be a part of any agreement to avoid the fiscal cliff? >> who is gaming this? what will the deal be? it is not a game nor is it a deal. this is a serious fiscal and tax policy. it is about the economical future of our country, about the great country we live in and making sure it continues to be the greater country and economy in the world. we have different opinions about that. i am with the president. we saw what happened to the economy and the response to the markets in august when the

republicans were willing to go off the cliff. some are saying not to pay our debts, jeopardizing the full faith and credit in the u.s. this is not a game. it is serious business. if we do not pay our bills and debt, we will see interest rates go up, and it will get harder to borrow. it not how you make decisions about bills and the budget. we have already made those decisions. this is just paying the bills. we are not happy about it. we should not be. the debt is serious. this is not a game. the last thing we want to do to a fragile economy. we would like to see it more robust. we cannot go back to threatening or having the government fail to meet one of its basic obligations, which is to pay its bill.

>> i will ask you about your view on the impact. if you are able to reach an agreement and set up a process to produce the $4 trillion in deficit reduction both sides are talking about, how big of a deal with that before the economy? >> it would reject a failed economic philosophy that we can lower tax rates for wealthy americans and we will be fine. we have been doing that over a decade. we find that better than fine. we want to seriously to grow the economy. that means making tough choices right now and for the future. getting the spending cuts. how do we do that in a way that is agreed to and we can get it done and not dial that back?

that we raise hard dollars now. make investments that insure our economic competitiveness for the future. it is an important message to americans as individuals so government can function. we have made decisions that benefit the middle class. that is what has made this country great. everyone that you have heard from in this poll has said, we are great americans. we need to make decisions. we need our government to help us do this and move us forward. if we want to be innovative and entrepreneurship, that does not happen. a lot of that comes from the investments we have made in education, in how we do our tax policy. are we innovative in advanced

manufacturing? these are things we could to. there are tax deductions we could get rid of. they are old. we do not need them. it would be important to the investor community and business community. there are companies that are sitting on millions of dollars and billions of dollars, waiting for the right moment. if we want them to start spending, we need to make decisions. it will not be good enough if we do not deal with the much larger question and give them certainty. some of the failed talks happened before. republicans would dig their heels in and say, it is our ideology or nothing. that will hurt the economy. they will say, see, i told you it did not work. that is the wrong way to work. we have to reach an agreement. we have to do it for the long term and short term. >> you are doing an exemplary job of keying up my next question. i don't know how you're intuiting this. >> there is a natural flow here.

>> when we polled people about, what is the to-do list for washington, the deficit was number one. close behind or other concerns -- medicare, jobs, the education system. what are the actions we could take that would have the biggest payoff for the next 10 or 20 years? eliminating the deficit ranked only fifth out of six. people saw other things as more important. how does that have to be structured to put us in a position to deal with other concerns people have to tap the issue of the sequestered? >> how do we make those cuts? the president was clear. we should not cut access to higher education.

in my state, we have seen cutting of higher education. how will that help pennsylvania or americans? how will we track the companies if we do not have a skilled workforce? we need to deal with that and make sure we are helping them get a basic education. push our schools to do better, even our finest public schools. my district has lots of good schools and some that are struggling. even the wealthiest school districts rely on the federal district to help them with the poorest children. that is really important. that starts at an early age. access to high education. i don't know how families in my district who are earning family incomes of $50,000 send their kids to college.

how do they do that? where is the income to do that without pell grants and loans? use some of our tax policy to incentivize advanced manufacturing. the manufacturers that are growing are the ones that are doing advanced manufacturing. you see the use of computers, robotics, a bit of technology being used. to do manufacturing right now is not what it used to be. you need to have math and computer skills and good work skills. a lot of people need me more postsecondary education.

i have a proposal that would use tax credits for advanced manufacturing that are making products over patents. other nations are doing this. we are competing now with other advanced economies. we need to make sure we have some understanding that we are functioning in a global marketplace. we need some work to be done in making sure the tax policy looks to the future and how we grow entrepreneurs. basic investment in research is not to be taken lightly. it is medical research, research on new energy sources. entrepreneurs come out of these kinds of advances where we see basic research funded by the government that we take for granted. if we keep cutting that and not being sure about it, even r&d tax credits.

doing them retroactively benefits companies that we are doing it anyway or took a chance. we have to make it permanent. we have to say, this is something you can count on. we have to figure out how to do it. >> on entitlements, from a democratic side, in 1969, the federal government keeps track of the total share of spending that goes into investment in research and development, infrastructure, education, and training. 31.2% of the federal government was devoted to investment. 31.2% were payment to individuals. today, 50.6% of the government is investment and payment to individuals -- double what it was. from a democratic perspective, can you sustain the programs that democrats see as critical

for investing in the next generation without finding ways in a graying society to control the growth of entitlement spending more than the affordable care act point system does? >> we have a democratic shift happening. it is happening for the next 25 years. many of us baby boomers would like to live forever. we are probably not going to. we will try. that is reality. we have 10,000 new seniors every day in this country. we have fewer workers to pay into medicare. that is an issue. yes, we have to contain the rate of growth and costs. those are a lot of seniors we have promised to take care of. can we make sure that the system is more efficient?

yes, we can. shall we move it faster? yes. we should demand more accountability on that. we have to have beneficiaries participate not by denying care or benefits but by being healthier, taking up recommendations, taking care of themselves, not doing too much doctor shopping. they are responsible on both sides. you can also have lousy gene. we have to do everything we can to get us through the next 25 years. we need to recognize that we will have a responsibility for seniors coming online. we do not enough to do we do not have enough workers to do that. we have to look at the revenue side and cost side and improve efficiency. >> looking at what came out of the debt ceiling in 2011, the focus has been on discretionary

spending than entitlements. what will it take to have a resolution of the deficit problem that is generationally fair? many of the programs that are investments in the future are probably more at risk in these talks than the entitlement programs. how do you structure something that is fair to the next generation? >> revenue is part of it. making sure that a weaker the economy and that people do not need food stamps because the have decent-paying jobs. there are issues about wage stagnation over the last decades that is serious. health benefits pay into some of this. some if it is tax policy. earned income at a much higher

rate than unearned income. continue to grow the middle class and economic opportunity. it is about growing that economic opportunity. you heard some of the families and young people talk about how they are going to college, they are worried about the debt. will they get a job? do i go to graduate school? is it worth going into that debt? how do we help to make sure they get jobs? some of this has to happen. we have to do it now. education takes a while. basic education is 12 years. higher education is four years. we need to make sure we have a trained and skilled workforce.

it comes back to making decisions now that make the right investments. talk about the investments. invest in education, infrastructure, and innovation. that makes sense to the american people. that is what grows the economy and creates a skilled economy. how do we get there? we need to get past where we are now. we need to get agreement that it makes a difference that we are doing basic research and funding education. that people are not on their own. on the entitlements, we can have a serious discussion once we get republicans to agree that we will not end medicare. once we get that agreement -- we will not cut benefits or cut people off of medicare or shift the costs to individual seniors and families.

we will not kick people out of nursing homes. then you can have a serious discussion about how to do it and create sustainability. >> neither idea was included in boehner letter to the president. they have taken those off the table. >> yes and not. they talked about cutting $400 billion out of medicare the right way and $200 out of medicaid. make sure people get the healthcare they need in a most cost-efficient way and that they have health coverage throughout their lives. they talk about a lot of funding cuts coming out of discretionary spending and other programs.

a lot of those are health programs. there was double and triple hitting. >> one thing that has been a fascinating and consistent thread throughout the polls is questioning of the value proposition of higher education. most people want their kids to go to college. growing anxiety about whether it is preparing them to succeed in the workplace and about the costs and debt is if the benefit justifies the costs. mathematically, it will. what is the best strategy on expanding access to college?

more student loans and student aid or more pressure and penalties on colleges to try to slow the growth in rate of tuition? is the answer more student aid? is that contributing a bubble in student debt? >> student aid is limited to lower middle-income. it gets capped too soon. i hear some say their kids cannot get a pell grant. colleges are trying to fill in the gap. democrats lowered the cost of borrowing. i have legislation that makes sure all students are informed about federal borrowing because it is less expensive than private borrowing. it reduces the interest rates so they pay less.

use all of that before they go to private borrowing. understand the cost differential. the notion that colleges have to be more affordable is one many are concerned about. we are working with our public universities. commuter campuses are growing because it is cheaper. students are taking five year -- not than four years -- to get to college because they are working. >> or not getting through at all. >> we have to push our colleges and universities to say that success is not admission. the success is graduation. >> does higher education meets the same accountability revolution in k-12 since the report in the 1980's?

>> we all pay for college. we pay for basic education. we pay for it -- mostly local and state dollars, some from the federal government. it is a very different system. >> let me bring in the audience for some questions. do we have any questions? i have a couple more if we don't. >> my question goes back to the one that you were just talking about -- the college and data. are you saying for public education, we pay for k-12 so it is something we should collect a lot of data on? getting to the two-thirds of the students that need remedial courses once they get to college, is that something that because we already paid for it

in k-12 we should be able to charge back the school district? how would you address that? >> that is an interesting notion. we have to make sure that k-12 education works and it is working at the highest levels and that students who graduate have the skills. it is not acceptable to have a high school diploma and not have the basic skills. we should work backwards and take care of that in making sure basic education works. we have an issue in terms of the students who dropped out of high school and do not have the basic literacy skills they need. work for the students who are going for college and for those who go on to other skills and jobs that do not include college.

we do not do as good a job in this country as we should in making sure those young people or older people who do not have a college education have a way to get that training that enables them to get jobs that exist now. this is an important role. >> identify yourself. >> edward roeder from the sunshine press. the tem party seems to have been in decline since they nearly forced a default on our national debt a year ago last summer. they did not do well in the november elections. do you think there are enough banana republicans to force obama to deal with the national debt?

will they have to cave on that? >> there are republicans who have stepped up and said, look, we have to be serious about revenue. we believe in middle-class tax cuts as well. start with, we agree. it is important to have that conversation. republicans and democrats have not been talking to reach an agreement. on the debt -- on almost every big decision that we have made in the last two years, democrats have had to have 100 people or more vote to reach common ground. it is when we were together -- >> are there another republicans who would vote to extend the debt ceiling without conditions

to allow us to avoid another confrontation? >> let us hope so. look what happened yesterday in the senate. it was so interesting. senator mcconnell said, give the president the power to raise the debt ceiling and we could stop it, but we don't have to affirm. he took him up on it. he said, no, i did not mean it. we will like him to really mean it. it would be helpful to provide that certainty to the economy. pressure has to be on the republicans to not use the debt ceiling as a tool to get more spending cuts. we have to decide on the budget and that the debt ceiling cannot be used as a tool and bargaining chip. we will not get another democrat to say, sure we will deal with

the debt ceiling later and have that fight again. we have to agree that we will not do more when the debt ceiling comes on or our economy will be held hostage over that. >> rebecca holland. i want to ask about the sgr fix. will that be extended? what is the outlook for coming up with a better payment provide solution? >> sustainable growth rate for payment of doctors under medicare. >> we will not let the cut happen. we should pass my bill. we should pass it.

the schwartz new payment innovation system. we have written it down. this would set us on a path. we have some agreement between republicans and democrats, particularly between the republicans and myself and some of us who care and understand about it. we need leadership to embrace it. we have to get some certainty there and into health care system. we have to as providers to move in a different direction. embrace more coordinated care. reduce their costs in the right way. they cannot have this threat of a 30% cut hanging over their head. we should may the payment to physicians in the future model this effort to reduce costs in the right way. we should get it done. the sooner the better. >> you are optimistic that there will be some kind of agreement? >> we have to have an agreement. we will have an agreement. it is a moment of time where we can find common ground. we should.

>> beyond that, what else can get to the president's desk? comprehensive immigration reform? >> let us do comprehensive tax reform. corporate and individual. i do hope we can do comprehensive immigration reform. that would be something the american voters and republicans are starting to say. they cannot punish some people while they are helping other people. they have to make sure they are doing this in a serious way. >> how will health care play out in republican states in a resistance? how big a challenge will this be for the law?

>> we should implement this law. this is important to american businesses and american families to make sure they have access to health coverage. the law was written in a way hopes governors would do the exchanges and be a partnership between the federal government and states. it is a republican notion. governor christie did not want to do it. this is disappointing. i want to make sure pennsylvanians are not disadvantaged.

the federal government will have to set up that exchange so they have access to affordable coverage so they can by private insurance in a way that makes sense and there is competition to reduce costs. implementing this law the right way is important. i would love to see the republicans in washington be able to embrace this. for examples, under part d, the democrats and not like the way the republicans added prescription drug coverage. we thought it should be covered by medicare. it did not mean that we would not help to make it work. i had just come into office. we had one form after another in my district to make sure seniors understood how to use it and that it worked. that is what ought to happening now. we ought to have republican governor say, this is the law of the land. i will make sure in pennsylvania my families and businesses have access to every advantage economically and for

their health security. it is distressing to think we may not be doing it. which state you live in may make a difference in terms of whether you have access. that is not a good thing. we will have to step in and make it work. hopefully, it will improve quality. that would be a good thing in this country. >> we did not get to discuss the detroit tigers, which we might have done if gene sperling were here. short of that, this has been an incredible tour of domestic issues. join me in thanking the representative. >> thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> panelists and representatives from think tanks and academia the cost the middle class perspectives on the economy and the fiscal cliff. this is an hour.

what were you going to say? what's i think they go hand in hand. from a business perspective, large corporations are sitting on lots of cash. they are uncertain of what the future will bring. that is the economic future, but the future of tax policy and the rest of that. that is keeping the economy back. if we can reach a deal where we are not coming to blows every six months or one year on what tax policy will look like for another six months, that will give us confidence and will create jobs people want. i am not sure if there is a bifurcation between what washington is focused on and what people want.

i think this is about jobs and economic growth. >> i did find one thing surprising. behind retirement programs, social security and medicare, seems to be job creation, deficit reduction was off of the table. what came in the third or fourth every time and then to about six questions in terms of what is on people's mines is the extent to which higher education is available and to the extent that it is relevant to labor markets, a different vision of higher education and then is our tradition. the other piece of it to in the section of the polling that was basically about the federal role, people seem to be saying quite loudly that the federal government should have a direct role of in monitoring and driving down costs and heightened education.

one was 43% and the other was 41%. one was a bribe that and give them more money. 41% was penalize them if they raise their tuition.

we have to do something about that. let me tell you my frustrations with why i do what i do, being an entrepreneur and investor. i have great respect for mark, leaving that role, that a messy world of politics -- messy world of politics. we were talking about a high- school emigration, stapling a green card to ph.d. and masters for at least a decade. i am sick of talking about it. we have to do something about it. if we do not do something about it quickly, we will lose the talent battle. one of the statistics that mark was telling us, 1/3 people starting companies in the virginia area, half are in silicon valley, but it has dropped 10 points in the past decade.

we are starting to lose the battle. if we do not move quickly to reverse the trend, that will continue to slip. these people are not just going away. they are going to other places to create other companies. as more people go away and those entrepreneurial ecosystems start building up, those nations are going to become more of a magnet for talent, capital, ideas, and the genie will be out of the bottle. it is time to come together in a bipartisan way, had people like senator warner who are willing to work together to forge a consensus on this issue. there are some paths forward. immigration needs to be less of a debate about a problem and more of our recognition of an opportunity that if we are successful in navigating these waters, we will be extremely well positioned as a nation.

if we do not, we will be in really bad shape. >> i think is probably obvious by now that this is not a debate. [laughter] in the interest of the playing doubles advocate, let me ask a few questions. president sullivan, you talked about a 60% increase in applications to the university of virginia, driven largely by chinese students. what are the appropriate limits on foreign students in a public university, or admitting them into the country? how do you decide what the appropriate and optimal limits art? >> at the undergraduate level, we have a serious obligation to the commonwealth.

70% of our undergraduate students come from commonwealth of virginia. that means anybody who is international, or from one of the countries outside of the united states, they are competing for the other 30%. the undergraduate student body has risen very slowly because we have lots of competition in that pool. particularly in the graduate applicant pool for some stem at fields, 85% to 95% of your applicant flow may be international. if you are going to have a full- sized graduate class, you'll have international students. it is particularly true in engineering. engineers with lower levels of a degree qualification are in such high demand in united states, it is hard to get them to hang around to get an advanced degree. a very common experience in the chemistry department -- american students, and, they start to study for a chemistry ph.d., and she finds out that with a

master's degree, she can make a very good living. the phd plan is abandoned, and instead, the master's candidate goes to industry. that happens over and over again. foreign students come here, they will stay all the way through the ph.d. program -- they cannot get that job. they want to complete the reason they can the united states. we have a high completion rate among foreign graduate students and relatively low completion rate among american students. it is not that american students cannot do the work. it is that they have intervening opportunity which four students do not have. >> center warner, you made reference -- senator warner, you made a reference to the failure of the education system to produce more stem students.

shouldn't the focus be on fixing that rather than bringing in people from overseas? >> you have to do both. there is a short-term problem and a long-term problem. i would also add, we do, what, 30% of undergraduate students in virginia, it helps with enormous diversity, it helps with national ranking. it helps to subsidize the cost of the free conscience money. when we were governors, we put more money towards our state university system. this is a problem that has been growing. i remember in the 1990's, i was chair of the math and a side collision in virginia. at that point, literally, 45% of our middle school math and science teachers were not qualified to teach math and science.

even at that point, you could go out and get a better job than being a teacher teaching math and science. what we have is a longer-term problem, i say this as a proud father of three daughters, all three of which are about in the. middle school, they're losing their interest in math and science. you look at the same trend in terms of children of color. there are a series of issues from that and science and not being taught in the most innovative and interesting ways. i think it goes to what kind of role models there are. not having the corporate support system. it is not a new problem. data is quite frankly getting worse going forward. that does that question, yes, we need to reform our education system, particularly focus on middle school years, but we

also have to recognize, as steve mentioned, one of the opportunities and challenges of the internet is that that has made space and distance and time disappear in terms of the exchange and flow of information. you can build it anywhere. if you can build it anywhere, that means america's international companies put footprints everywhere, and they can choose the microsoft's and googles, where to locate. if they do not enough talent, they will relocate. they are being trained at our universities. oftentimes the case is that they're not going back home. they're just driving north to toronto and looking at places like canada where there is much easier immigration.

>> there are people that say that the problem is not that you cannot get the talent in the united states, but that it costs more and that this is about a less expensive alternative. >> no, i do not think that is true. i think it is also worth putting this debate around high skilled workers, particularly stem graduates and advanced degrees, in a broader context. the legislation that senator warner introduced, the startup act, and basically created a stem visa. we had 300 million people in this country. the issue of immigration and more broadly that is hotly debated, and hopefully there'll be some resolution sooner or later, about 11 million undocumented people in this country. the dream act would affect about 1 million people or about 1.5 million people.

the data suggests that they are job makers instead of job takers, in terms of what they directly duke and the companies they create. they've ripple into the communities. it was not just that aol was recruiting people, but we were creating jobs for people. from construction to restaurants -- it was a broader ripple effect in the community. it requires people to take that idea, start with three or four people, then 300 or 400, and one recent example that shows the importance of immigrants and the connection with immigrants and entrepreneurialism -- i should mention that almost half of the fortune 500 companies were started by a first generation americans.

i'd be known how we lost the manufacturing system. seven years ago, there was a bankrupt factory in upstate new york. an immigrant bought it. he said i will figure out some way to use it. seven years later, he created a company that has hired 1500 employees and will do $1 billion of sales. it is the number one yogurt brand. seven years ago, it was a bankrupt factory in upstate new york. the impact more broadly is pretty significant. >> you talk about how countries around the world are trying to copy that secret sauce of america's innovative society.

do any of you see any indication that the united states' appeal, from its great research universities or to people who want to start companies, that the united states has lost any of this appeal? >> absolutely. the university may be different, but as it relates to the entrepreneur ship and creating companies, absolutely. that is not to say that we do not have a lot of things going for us. to suggest that there is not robust entrepreneurial ecosystem developing in many different countries is just not accurate. one fact that should be scary

is that there is a venture firm, xcel partners, that back facebook -- all of their venture investors were silicon valley. now they have more venture investors in china than they do in silicon valley 10 years later. why did they do that? they believed the opportunities there are significant. they think there are more opportunities there than there are here. >> i would say that there have been other countries that have expanded their opportunities. there was not much chance to go back home 25, 30 years ago. we have and flattening the globe. it happens. there is a free flow of capital

and ideas. i still would not try our position for anywhere else in the world. we still have a stronger university base. we still have with our challenges more access to capital than anywhere else in the world. we have an entrepreneurial system, even though some complain about the level of regulation, it is still robust. not every idea we originally thought of in america. we used to have such an enormous advantage in every field that we had the ability to look inward and think our ideas were always the best and not worry about competition. now we have to worry about the competition. i think we will step up to it. i think part of this is around this immigration issue to make sure we continue to revitalize ourselves, which is what immigration is about. this is not the first time we have grappled with immigration.

>> president sullivan, how about universities? >> cannot think american universities will be in the situation at detroit found itself in years ago. we have a series of competition now. -- serious competition now. other countries are investing quickly in their universities and a lot of money. in china, at the same time we are not investing in public education, they are investing heavily. if you walk through chinese university, you'll see an amazing, huge, brand new laboratory buildings. they do not have people in them yet. they do not have the human capital. they put the physical capital in place. the day is coming when those new ph.d.s that are graduating, even all they could stay in the united states, there will be a job in china instead.

the day is going to come when we are facing serious competition. europe is not being sanguine about this either. the european research universities are working hard, looking for ways in research areas where they can come together and they can have a synergy in which the whole is greater than the sum of its parts. that overlooks the national boundaries and finding ways to overcome the national boundaries. >> let me add one other point. >> the senator rules, am i right? [laughter] >> this comes back to my obsession with the debt and deficit. one of the challenges is that any great business that invests in their work force does best. we have cut back on our public investments. the plan passed by the house of representatives would cut federal spending on all domestic items around education, infrastructure, and a workforce

turning to less than 5% of our total public spending. we can argue about the politics of that. that is not a business plan anybody would invest in if you are going to compete. >> one other point that is worth pointing out, if right now our universities were 100% people that were born or raised in america, 0% of people from other countries, and somebody proposed opening up the world, and said, let's have a target that someday half of the students getting these advanced degrees should be from other countries, the proposal would have been like the military service proposal. you have an obligation to serve as the country. if we are going to get

educations, then nobody would say, let's take half of those slots, given to people of other countries, give them educations, and then we'll take them out to compete with us? no. that is what we have put in place. i do not propose that we require people to stay and serve, but we should make it easier. >> before i go to the audience, i want the three of you to take out your crystal balls and tell us, the next 12 months, what is going to happen on this issue, steve? >> i am optimistic. i am cautiously optimistic. it goes back to what the senator says. the startup bill passed with broad bipartisan support in congress.

they came together on that legislation because it was important for entrepreneurs to get extra capital. even though it was election year, something did get done. it is because people recognize it was important. the good news is that people recognize that the issue is important. there is a general agreement on the solution around high skilled immigration. the problem is the politics of entrepreneurship and innovation and the economy and jobs. this has all been trumped by the politics of immigration. there are four paths, and one was the stem jobs act. it will not be taken up in the senate. there is a diversity lottery, it would result in raising the overall level of emigration. if there was agreement to include that, potentially, that bill could be passed. i do not think that is likely to

happen. the second option is what the president has indicated -- to link high skilled immigration and the provision of the startup act to the dream act. it is a broader solution around emigration. the third would be to say -- this just deals with the 50,000 -- the third would be to say let's deal with comprehensive immigration reform. the 11 million people, which we have to deal with clearly, and there is a desire more than there was a month ago to do that. even president george w. bush talked about taking up the issue and he called for a comprehensive solution. that is the third. the fourth path would be to say that this immigration pass is challenging and to build support for senator warner's bill. it would link immigration to regulatory issues, commercialization of research --

if i had to bet, i think something will happen this year. i think it will be something, either number two or number three. it will link to the dream act or republican version, the chief act. or perhaps it is comprehensive immigration reform. i do worry, even though that is a problem that we have to sell, that it gets pretty complicated, and the more complicated it gets, i am sure it is harder to get down. any one of those forecasts would be possible. i am optimistic that -- four paths would be possible. i am optimistic. >> i am optimistic too. i think there is an 80% chance that we are not going over the fiscal cliff. [laughter] i cannot think there is any chance if you look back at the history the immigration lottery system, which you will find an awful lot of those american

entrepreneurs, they came through that program, and this notion that there will be a trade-off, it is like pre- election. that was the political reality then, but not now. the change on election day was these items like startup 2.0 were challenging to get republican colleagues to come along. now everybody supports that. it was the starting point. the dream act, which i think it was an embarrassment that we do not pass that already, as somebody who lives in a commonwealth where i see many kids who grow up in virginia, went to virginia schools, parents have paid taxes for years, and in the process of trying to continue their american experience -- we luckily were able to overturn

tried to exclude those from going to college. that i think becomes now trading at a given but it sure as heck could be done fairly shortly. the challenge is now going to be, because there are these 11 million undocumented persons, who overwhelmingly work in america, try to sort through some at the legal status. i think that has got to be a national priority. the items of what could have passed before -- there has been a seismic shift. i think rightfully so. people say that we need to do more. not just deal with high skilled, not even just deal with those kids who have lived here for years, who came here with no choice of their own, give them the path to serve in the military or get an education.

>> better than a 50% chance that you get a comprehensive solution? >> i hope so. i think there are some rightfully say, it will be the subject of a lot of debate and discussion. we will need the scholars and the folks in the audience to help us think for this. do you take this through a series of legislation pieces? do you do it through a comprehensive measure? those of the questions going forward. >> i think it is hard to take an issue on which a lot of people agree and get a lot of action on it unless there is trust that a lot of the other issues that may have less consensus -- have trust that those issues will also get addressed. that is one of the reasons why comprehensive immigration reform has been attractive to ensure that all of these issues get addressed at once. or, it is a reason that the senator's bill is attractive because it sees immigration in the context of other innovation issues.

i want to pose another way that you could do the highly educated immigrant as part of the larger issue. that is -- [indiscernible] what i see happening in many of the states, it is completely renewed interest and why american students are not doing as well in the stem fields as you might expect. while we do not have our graduate schools full of applicants coming to american schools, instead of foreign applicants. i would not want immigration reform to become a substitute for our continuing to focus on our own problem of getting american students excited and interested in science and engineering.